Case ID: ad_169/html/0063-01.html
Source: Caselaw Access Project
Author: {"author": "Rich, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of Supplementary Proceedings: Leo Kaphan, Judgment Creditor, Respondent, v. Rogers Brothers Grocery Company, Inc., Judgment Debtor, and Francis H. Leggett & Company, Appellant.
    Second Department,
    July 30, 1915.
    Supplementary proceedings — order declaring third party receiver of goods.
    In a proceeding supplementary to execution, the court is without jurisdiction to make an order declaring a person not a party to the proceeding and not sworn as a witness therein, to be a receiver for the benefit of creditors of the judgment debtor under the provisions of section 44 of the Personal Property Law, as amended, which makes the transfer of goods in bulk void as against the creditors of the transferrer under certain circumstances.
    Appeal by Francis H. Leggett & Company, thud party, from an order of the County Court of Kings county, entered in the office of the clerk of said county on the 1st day of March, 1915.
    
      Samuel D. Jones, for the appellant.
    
      Israel H. Perskin, for the respondent.
   Rich, J.:

The order from which the appeal is taken declares the appellant to be a receiver for the benefit of creditors of the judgment debtor, under the provisions of section 44 of the Personal Property Law (Consol. Laws, chap. 41; Laws of 1909, chap. 45), as amended by chapter 507 of the Laws of 1914, which makes the transfer of goods in bulk void as against the creditors of the seller, transferrer or assignor, under certain circumstances. The act provides, among other things: “3. Any purchaser, transferee or assignee who shall not conform to the provisions of this section shall upon application of any of the creditors of the seller, transferrer or assignor become a receiver and be held accountable to such creditors for all the goods, wares, merchandise and fixtures that have come into his possession by virtue of such sale, transfer or assignment.”

The appellant contends that the County Court erred in acting upon evidence taken in a proceeding to which it was not a party. This contention is based upon the fact that in a supplementary proceeding instituted against the judgment debtor, the testimony given by its secretary and treasurer relating to the transfer of property to the appellant is recited in the order from which this appeal is taken as having been considered in granting such order. Section 2432 of the Code of Civil Procedure provides for three distinct remedies, one an order made or warrant issued against a judgment debtor after the return of execution; one an order made or warrant issued against a judgment debtor after the issuing and before the return of execution, and one an order made after execution issued and either before or after its return against a person who has property of, or is indebted to, the judgment debtor; and it is provided by section 2433 that each of such remedies is a special proceeding. The appellant was not a party to the special proceeding; it was not sworn as a witness therein, but a distinct and separate special proceeding was instituted against it as a third party, having property in its possession of the judgment debtor, and this may not be done. The court is without power to make the order in a proceeding supplementary to execution.

The order of the County Court of Kings county should be reversed, with ten dollars costs and disbursements, without prejudice to the institution of such proceedings as appellant may be advised.

Jenks, P. J., Thomas, Carr and Putnam, JJ., concurred.

Order of the County Court of Kings county reversed, with ten dollars costs and disbursements, without prejudice to the institution of such proceedings as appellant may be advised.