Case Name: Merrill A. Teague, Respondent, v. The Ridgway Company and Others, Appellants, Impleaded with Ridgway-Thayer Company and John Adams Thayer, Defendants
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1911-06-09
Citations: 145 A.D. 277
Docket Number: 
Parties: Merrill A. Teague, Respondent, v. The Ridgway Company and Others, Appellants, Impleaded with Ridgway-Thayer Company and John Adams Thayer, Defendants.
Judges: . Ingraham, P. J., Laughlin, Clarke and Miller, JJ., concurred. '
Reporter: Appellate Division Reports
Volume: 145
Pages: 277–280

Head Matter:
Merrill A. Teague, Respondent, v. The Ridgway Company and Others, Appellants, Impleaded with Ridgway-Thayer Company and John Adams Thayer, Defendants.
First Department,
June 9, 1911.
Corporation — debtor and creditor — transfer of assets — remedy of creditor — complaint — sufficiency —joinder of actions — answer.
Where in an action by a judgment creditor of a corporation to recover the amount of his judgment from the directors and from another corporation to which it is alleged they sold the assets of the judgment debtor, the complaint does not allege that the transferee knew of plaintiff’s claim that it was eoneerned in a fraudulent attempt to injuré Mm, or that it did not pay full value for the assets, a demurrer thereto by the transferee on the ground of insufficiency should he sustained.
But where the complaint joins as defendants the judgment debtor, its directors and the transferee of the assets and alleges that the directors distributed the proceeds realized from the sale of the assets among the stockholders without paying or providing for plaintiff’s claim, a demurrer thereto on the ground that causes of action have been improperly united is not well taken.
Where plaintiff was granted judgment on the complaint and demurrers with leave to defendants to submit proofs of a meritorious defense, and they thereupon presented to the court a proposed joint answer based wholly on information and belief, which put in issue none Of the essential allegations of the complaint and which was verified by the' treasurer ■ of the second corporation accompanied by an affidavit of then- attorney which did not go to the merits, an order denying leave to serve the proposed answer will be affirmed.
Appeal by the defendants, The Bidgway Company and others, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county • of New York on the 3d day of March, 1911, granting the plaintiff’s motion for judgment on the pleadings against the appellants, and also from an order entered on the 28th day of March, 1911, denying the said defendants leave to serve, a proposed answer upon the plaintiff.
James B. Sheehan, for the appellants.
Edmund F. Harding, for the respondent.

Opinion:
Scott, J.:
Appeal by defendants the Ridgway Company, E. J. Ridgway and George W. Wilder from two orders, one granting plaintiff's motion for judgment upon the pleadings, thus virtually overruling appellants' demurrers, and the other refusing the appellants leave to serve answers.
The three appellants demurred separately, serving identical demurrers. The plaintiff moved for judgment upon the pleadings as against them. This motion was granted, the order containing the following clause: '(Ordered that the said defendants may within ten days-from the date, of this order submit proof by affidavits of a meritorious defense. " The defendants' thereupon submitted a proposed joint answer, accompanied by an affidavit of their attorney. The proposed answer is verified by the secretary and treasurer of the Ridgway Company, and is based wholly on information and belief. The affidavit of the attorney does not go to the merits. The complaint is modelled after that in Darcy v. Brooklyn & New York Ferry Co. (127 App. Div. 167; 196 N. Y. 99). The plaintiff is a judgment creditor of a corporation known as the Ridgway-Thayer Company, and the purpose of the action is to recover from the individual appellants, and another, who were directors of said corporation, the amount of plaintiff's judgment, on the ground that said directors sold all the assets of said corporation to the defendant Ridgway Company, and have distributed the proceeds among the stockholders of said Ridgw.ay-Thayer Company without paying or providing for plaintiff's claim. The demurrers are iipon the ground, first, that, as to each demurrant, the complaints faff to state facts sufficient to constitute a cause of action; and, second, that causes of action are improperly united. In the second, ground of demurrer we find no merit, but so far as concerns the Ridgway Company the demurrer for general insufficiency is well taken. The complaint contains no allegation sufficient to charge it with liability for the debts of the Ridgway-Thayer Company. It is not alleged that it knew of plaintiff's claim or was concerned with any fraudulent attempt to injure him, nor that it did not pay value for the assets transferred to it. As to the other appellants the complaint contains all the allegations necessary to hold them under the case above cited. The answer which the defendants sought to interpose contained no defense available to the appellants Ridgway and Wilder. It appears upon a casual reading, to contain a number of denials, but a more careful scrutiny shows, that every essential allegation of the complaint remains admitted. The counterclaims attempted to be pleaded by way of offset might be available to the Ridgway Company, if the action were allowed' to proceed- against it, but are'not available to the defendants Ridgway and Wilder.
It follows that as to the appellants Ridgway and Wilder the order for judgment upon the pleadings must be affirmed, but as to the appellant Ridgway Company it must be reversed and the motion for judgment denied. The order denying appellants' motion for leave to serve the proposed answer is affirmed, with ten dollars costs and disbursements against the appellants Ridgway and Wilder.
. Ingraham, P. J., Laughlin, Clarke and Miller, JJ., concurred. '
As to appellants Ridgway and Wilder, order for judgment on pleadings affirmed-; as to appellant Ridgway Company, reversed and motion for' leave to serve answer affirmed, with ten dollars costs and disbursements against appellants Ridg-way and Wilder. Order to be settled on notice.