Case ID: ny-st-rep_4/html/0695-01.html
Source: Caselaw Access Project
Author: {"author": "Follett, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles E. Hubbell, as Receiver of the Syracuse Iron Works, Resp’t, v. The Merchants’ National Bank of Syracuse, App’lt.
    
      (Supreme Court, General Term, Fourth, Department,
    
    
      Filed November, 1886.)
    
    Practice—Fraudulent conveyance—Action to set aside—Grantor necessary defendant.
    The rule is well settled that in actions to set aside fraudulent conveyances the alleged fraudulent grantor is a necessary party defendant. Miller v. Hall (8 J. & S., 262; affirmed, 70 N. Y., 250), followed; The Attorney-General v. Guardian Mutual Life Insurance Company (77 N. Y., 272), distinguished.
    Appeal from an interlocutory judgment entered upon an order overruling a demurrer to the complaint, interposed by defendant upon the ground that there was a defect of parties.
    
      Henry A. Maynard, for resp’t; Forbes, Brown & Tracy, for appl’t.
   Follett, J.

October 7, 1884, the Merchants’ National Bank sued the Syracuse Iron Works on its promissory notes. On the same day the Syracuse Iron Works appeared in the action and made an offer of judgment, which was accepted, and a judgment entered pursuant to section 738 of the Code of Civil Procedure. On the same day (October seventh) an execution was issued on the judgment to the sheriff of Onondaga county, who, on the same day, levied on chattels of the Syracuse Iron Works, and October 14, 1884, sold them under the execution. October 7, 1884, the plaintiff was appointed, and October 8, 1884, qualified as temporary receiver of the Syracuse Iron Works, in a creditors’ action brought under section 1784 of the Code of Civil Procedure, and December 9, 1884, he was appointed permanent receiver by a final judgment in the creditors’ action, pursuant to section 1788, Code of Civil Procedure.

The receiver brings this action to set aside, as fraudulent, the judgment of the Merchants’ National Bank, and to recover from it the value of the chattels sold under the execution. The defendant demurred, upon the ground that there was a defect of parties defendant, because of the nonjoinder of the Syracuse Iron Works.

The case of Miller v. Hall (8 J. & S., 262; affirmed, 70 N. Y., 250), reviews the conflicting decisions, and settles the rule that in actions to set aside fraudulent conveyances the alleged fradulent grantor is a necessary party defendant.

The Attorney-General v. The Guardian Mutual Life Insurance Company (77 N. Y., 272), which is relied upon, is not in point. That case was under a statute which authorized the supreme court to dissolve the corporation, and, it having been done, the corporation was no longer in existence and could not have been made a party. The case at bar was not brought under sections 1785 and 1786 of the Code of Civil Procedure, and the Syracuse Iron Works has not been dissolved, but is an existing corporation, with all of the legal rights of a corporation, and is a necessary party defendant in this action, brought to set aside a judgment and a transfer of its property had by its consent.

The interlocutory judgment must be reversed, with costs, and the demurrer sustained, with leave to the plaintiff to plead anew within twenty days after notice of the entry of judgment; upon payment of the costs.

Hardin, P. J., and Boardman, J., concurs.