Beardsley Scythe Co. v. Foster , 34 How. Pr. 97 ( 1867 )

Bockes, J.

Appeal from the judgment of the general term of the supreme court, affirming a judgment directed by a referee.

The action was put at issue, and referred to a referee to hear and determine. When the case was brought on for trial,, the objection was raised that the complaint did not state facts sufficient to constitute a cause of action. The referee sustained the objection and dismissed the complaint. On appeal, the general term affirmed the judgment. Thereupon the plaintiff appealed to this court.

The complaint is most singularly and inartificially drawn. It is difficult to surmise, and impossible clearly to perceive, what theory of action the pleader entertained and endeavored to present by the pleading. It is entirely defective as a creditor's bill, to reach property fraudulently transferred, and equally so if the action was intended to enforce performance of the agreement set out, and which was evidently supposed to confer upon the plaintiff a right of action.

The complaint states that the plaintiff recovered a judgment in .the supreme court against one Wm. Osbom, for $2,209.93, on a demand originally incurred by the firm of “ George Clow & Co.,” which firm consisted of George Clow and said Osborn. That execution on such judgment was issued andremainedunsatisfied, except forthesum of $175.64, and that the balance remained unpaid. That both Osborn and Clow were insolvent.

It is also averred that the defendant became possessed of the chattels, property and dioses in action of Osbom, which originally belonged to the firm of "“George Clow & Co.,” under a bill of sale from Osborn, coupled with an agreement having for its object the hindering and delaying of the creditors of the firm, to the effect that the same should be converted into money, and applied by Osbom to the payment of the liabilities of the firm of “ George Clow & Co.,” and whatever excess should remain, was to form and constitute a partnership fund between Osbom and the defendant, in a new business in which they proposed to engage.

The fhrther averment is, that the defendant having so become possessed of such property under this agreement, in violation thereof, retained the possession of the same, and converted it to his own use.

The prayer is, that the defendant may be compelled to account for the property and its avails, which came to his hands under the agreement, to the end that the same might be applied in satisfaction of the plaintiff's claim. General relief is also demanded.

The complaint is radically defective as a creditor's bill to set aside the sale and transfer from Osbom to the defendant. It-does not appear that the plaintiff has exhausted its remedy at law against Osbom, the judgment debtor, inasmuch as it is not averred that an execution was returned unsatisfied in whole or in part; this is essential to jurisdiction in this class of actions. (Crippin agt. Hudson, 13 N. Y. 161; Forbes agt. Wader, 25 N. Y. 430-434; Dimby agt. Tallmadge, 32 N. Y. 457; see remarks of Judge Wright m the cases cited, and the authorities there given.)

It is averred that an execution issued, and that $175.64, 'were made thereon, and that the balance of the judgment remains unpaid. But it is not averred that the execution had been returned. This omission was a fatal defect to the statement of a cause of action in the nature of a creditor’s bill.' Nor was this defect cured by the allegation that both Osbom and Clow were insolvent. It was said in McElwain agt. Willis (9 Wend. 548), that the actual return of an execution unsatisfied, was essential to the maintenance of such a bill, both before and under the Revised Statutes, and that the place of such averment could not be supplied by an allegation of a total want of property. This remark received approval in this court in Crippin agt. Hudson (13 N. Y. 161-165), where.it was said that the same rule obtains since the adoption of the Code.

An action in equity may be maintained in aid of an execution, without its return, when there has been an actual levy, with a view to remove fraudulent claims upon the property levied on. But such is not this case. No such relief is demanded, nor are there facts alleged on which it could be claimed. . Neither is it directly averred that the arrangement between Osbom and the defendant, and the transfer of the property to the latter, were made with intent to hinder, delay • and defraud the creditors of Osbom, and, therefore, void. Trae, it is stated in one part of the complaint that the defendant proposed to Osbom that the payment of his liabilities might be postponed and delayed; and that his creditors and those of “George Clow & Co.,” might be kept off and delayed in the enforcement of their demands, by the plan therein (and hereinbefore) set out, to which proposition and plan, Osbom agreed. And in another part, it is stated “that except for the purpose of putting off, or hindering and delaying the creditors of the said “ George Clow & Co.,” the aforesaid notes and property, were to remain the property and effects of said Osbom.” But there is nowhere a direct averment that the sale and transfer by Osbom to the defendant, was with intent to hinder, delay and defraud creditors, and, therefore, void. Such an averment would be contrary to the general scope and tenor of the complaint. It is entirely plain, I think, that the pleader did not count on the invalidity of the contract between Osbom and the defendant, but rather on its validity and breach. The theory of the complaint (if indeed it has any), is to enforce the contract. And again, in an action to reach property fraudulently disposed of by Osborn, the latter was a necessary party, in the absence "of all excuse for the omission. (Lawrence agt. Bank of the Republic, 35 N. Y. 320—4.) Perhaps this objection should be deemed to have been waived by the defendant, pursuant to section 148 of the Code, because not taken either by demurrer or answer. But it is unnecessary to consider this point at all, as it is very clear, that for other reasons above given, the complaint is fatally defective as a creditor’s bill, and to reach property frandulently transferred by Osbom to the defendant.

The action, however, was brought very evidently to enforce the agreement made between Osborn and the defendant, set out in the pleading. In this view, can the action be maintained on the facts stated ? It is very obvious that it cannot be. The plaintiff shows no right to the contract, or to its enforcement. As the agreement is stated' in the complaint, there was no promise, even, on the part of the defendant to pay the plaintiff’s claim. It was well said in the court below, that the plaintiff shows no right to enforce contracts between Osbom and the defendant. The scythe company was not, either in fact or in law, the assignee or owner of the contract, nor of any claim or right under it, and of course, had no right to demand its performance. The dismissal of the complaint was obviously correct.

It is suggested that the judgment entered on the decision of the general term. is erroneous, for the reason that it includes the general costs of the action embraced in the judgment directed by the referee, as well as the costs of the appeal. As a matter of practice, this was clearly erroneous. It has long been the settled practice to enter judgment for the costs of the appeal only in the judgment of affirmance. •Indeed, an order of affirmance gives a right of recovery only for the costs of appeal, and no new judgment for a recovery against the party should be entered except for those costs.

• This was decided in Eno agt. Crook (6 How. Pr. R. 462). It was there correctly stated that there was an obvious impropriety in entering up two judgments in the same court for the same demands. “ That on affirming a judgment at general term, the court does not direct a new judgment to be entered for the original claim. But it simply declares that it is satisfied to let the former judgment stand, and, therefore, simply affirms it. This is all that the entry of judgment should contain, unless costs are awarded, in which case it should adjudge the costs to the prevailing party.”

Such was held to be the correct practice, by the superior court of the city of New York, in. De Agreda agt. Mantel (1 Abb. 130), decided at general term of that court. In that case the judgment of affirmance included the former recovery. The court held, that this was error in practice, and directed the second judgment to be vacated except for the costs awarded to the appellant. This question of practice was again under consideration in the supreme court, in Halsey agt. Flint (15 Abb. 367). The judgment included the interest upon the judgment which was affirmed. The court at general term held, that such interest did not properly come into the judgment of affirmance. It was here said, that “to allow the judgment of affirmance to embrace the amount of the original judgment, would be to allow two judgments for the same debt—might in some cases oppressively accumulate interest—and would lead to an onerous and unnecssary multiplication of liens upon the debtor’s property. Hence it has become the established practice, and is settled by the court of appeals as the only proper practice, to exclude from the judgment of affirmance all sums and amounts secured by the judgment in the court below.” ' But the objection involves a question of practice merely, to be corrected, by the supreme court, in case the respondent shall seek- to enforce a double collection of costs.

The error being one of practice merely, constitutes no ground for reversing the judgment appealed from. Such judgment, as pronounced, was entirely correct, and the error consists in the form merely in which it was sought to be carried into effect. If necessary the supreme court will hereafter correct the error.

The judgment must be affirmed, with costs.