Case ID: misc_17/html/0371-01.html
Source: Caselaw Access Project
Author: {"author": "Daly, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles Malkemesius, Respondent, v. Julius Pauly et al., Appellants.
    (Supreme Court, Appellate Term,
    June, 1896.)
    District Courts — Jurisdiction — Fraud.
    A District Court has jurisdiction, in an action upon a bond given by a claimant of attached property, to try the question of fraud in the making of an assignment for the benefit of creditors under which the claimant claimed title to the property, as no affirmative relief on that ground is asked.
    Appeal by defendants from a judgment of the First District Court for $186.46, in an action brought upon an undertaking on which defendants were sureties given under section 2912 of the Code, section 1323, Consolidation Act, providing as follows: “'If a person not a party to the action claims any property attached which is not reclaimed by the defendant as prescribed in the last section, he may at any time after the seizure and before execution is issued upon a judgment, rendered in the action, execute and file with the justice a bond to the plaintiff with one or more sureties approved by the marshal or by the justice, in a penalty in at least twice the value of the property claimed;, and conditioned that in an action upon the bond to be commenced within three months thereafter the claimant will establish that he was the general owner of the property claimed at the time of the seizure; or if -he fails so to do, that he will pay to the plaintiff the value thereof with interest; the marshal must thereupon dehver the property claimed to the claimant.” •
    Rudolph Dulon and Dulon & Roe, for appellants.
    Louis Levy, for respondent.
   Daly, P. J.

This judgment .was recovered against the defendants upon a bond given by them as sureties to secure the release of attached property as provided by section 2912 of the Oode of Civil Procedure, conditioned that in an action upon it the defendant Julius Pauly would establish that he was the general owner of the property claimed at the time of the seizure which had been released up'on the giving of the bond. .

The claimant Pauly was the general assignee of the judgment debtor in an assignment for the benefit of creditors executed prior ■ to the levy of the plaintiff’s attachment, and the issue in this action was whether that assignment was fraudulent and void. The trial justice by his judgment found that it was, and the.evidence is sufficient to sustain the finding. Aside from the testimony that the assignor’s agent, Gottlieb Manasse, who had entire charge of the business, and who, it was testified, had admitted that he had included in the schedule of liabilities $4,000 in notes which they did not owe, there were several discrepancies in the testimony of the witnesses for the defendants, called to support the correctness of the schedules, which may be regarded in two .ways, either as mistakes, or as slips in an attempt to conform their statements, to prearranged and .fabricated testimony.

The assignee, Pauly, first swears that he was not. a creditor at the time of the assignment, and, afterwards, when his attention is called to the schedules which set forth an indebtedness to him of $500, testifies that' he supposed that he had discounted a note for that amoUnt, and that it was at his bank where he had it discounted..

But if he had such a note it must have been in his possession and not at the bank, for Julius Friedlander, another suspected creditor, being called to corroborate'the schedules, testified "that he took the nóte up when due from Pauly himself. Julius Friedlander first swears that he nevér held any moneys belonging to the firm, but afterwards testifiés that he received $1,000 from Zeidler and $750 from William Friedlander to disburse to the firm, the two last, named being also named as creditors. Julius Friedlander also swears to the discount of notes for the firm, but does not produce them; and William Friedlander, who lent the $J50, testifies that he tore up the note he received for it. The trial justice had advantages that this court did not possess for determining what weight should be given to the testimony of the witnesses.

The appellants admit, in their brief, that they tried' the case on the theory that the District Court had authority to determine whether or hot the assignors were guilty, of fraud in making the assignment, and expressly state that they did not press an objection in that regard. But-no such an objection would be tenable, as no affirmative relief was asked, such as the setting aside of the assignment as fraudulent; and the District Court, therefore, was not without jurisdiction because of its lack .of equity powers, none being invoked by the plaintiff. A court of law has power to try the question of fraud when title to personal property is attacked upon that ground, and the District Court had jurisdiction in this' case. Richards v. Littell, 16 Misc. Rep. 339, and cases cited.

Jurisdiction to entertain actions upon bonds of this character is expressly conferred upon the District Courts by section 1323 of the Consolidation Act, and this jurisdiction necessarily involves the trial of title and of every issue which can arise respecting it, including that of fraud.

The judgment must be affirmed, with costs.

McAdam and Bischoff, JJ., concur.

Judgment affirmed, with costs.