Case Name: Galle et al. v. Tode et al.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1891-05-15
Citations: 14 N.Y.S. 531
Docket Number: 
Parties: Galle et al. v. Tode et al.
Judges: 
Reporter: West's New York Supplement
Volume: 14
Pages: 531–532

Head Matter:
Galle et al. v. Tode et al.
(Supreme Court, General Term,, First Department.
May 15, 1891.)
1. Fraudulent Conveyances—Actions to Set Aside—By Whom Maintainable.
An unsecured creditor at large cannot maintain a creditors’ bill to set aside alleged fraudulent confessions of judgment by his debtor in favor of other creditors.
2. Attachment—When Granted—Preferring Other Creditors.
Defendants, being in financial straits, converted their concern into a corporation, with the view of gaining time, but were informed by counsel that the transfer of their property to the corporation was fraudulent as to creditors, and would be set aside. They then had a meeting with their creditors, and assured them that all should be treated equally, and no preferences made. Thereafter the corporation retransferred its property to defendants, who thereupon confessed judgment in favor of certain creditors, caused executions to be issued thereon, and then issued a call inviting creditors to settle. Held that, defendants having lulled their creditors at large into security by promising a settlement without preferences, their subsequent confessions of judgment in favor of other creditors, though made upon bona fide claims, were fraudulent and void, and constituted grounds for an attachment at the suit of such unsecured creditors at large.
Appeal from special term, New York county.
Action by Samuel Galle and another against Adolph Tode and others to set aside alleged fraudulent confessions of judgment made by defendants. Defendants appeal from an order continuing an injunction and from an order denying motion to vacate attachment.
Argued before Van Brent, P. J., and Daniels, J.
Hahn & Myers, (Emanuel J. Myers, of counsel,) for appellants. Simpson & Werner, (Nathaniel Myers and A. J. Simpson, of counsel,) for respondents.

Opinion:
Van Brent, P. J.
The plaintiffs are attaching creditors of the defendants Tode & Walling, and certain other defendants are judgment creditors by confession of the defendants Tode & Walling, upon which executions had been issued to the defendants the sheriffs of the counties of New York and Orange. The plaintiffs, alleging said confessions to be fraudulent, have brought this action in aid of their attachment, seeking to have the said confessions and judgments declared fraudulent, and to have the sheriffs aforesaid restrained from proceeding under the executions above mentioned; and asking that the defendants account to the receiver, and when a judgment shall have been recovered by the plaintiffs against the defendants Tode & Walling, in the action in which the attachment is granted, that it be first paid out of the assets, property, and effects of said defendants Tode & Walling. In other words, the plaintiffs have brought a creditors' bill to set aside these confessions of judgment upon the ground of fraud, and to reach the property which has been levied upon under the executions issued upon said confessions, being simply creditors at large, having no judgment or execution returned unsatisfied. That such an action cannot be maintained has been the law in this state certainly ever since the case of McElwain v. Willis, 9 Wend. 549. It was recognized in the cases of Adsit v. Butler, 87 N. Y. 585; Adee v. Bigler, 81 N. Y. 349; Carpenter v. Osborn, 102 N. Y. 558, 7 N. E. Rep. 828; and Claflin v. Gordon, 89 Hun, 54, The plaintiffs, therefore, are not in a position to maintain this action for equitable relief, and the order continuing the injunction must be reversed, and the motion denied; but, in view of the fact that the point was not raised in the court below or even suggested, and, as far as we have been able to discover, not made upon the brief submitted upon this appeal, the reversal should be without costs.