Case Name: KINGS COUNTY BANK v. COURTNEY, Sheriff, et al.; DODGE et al. v. WILDES et al.
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1893-05-08
Citations: 23 N.Y.S. 542
Docket Number: 
Parties: KINGS COUNTY BANK v. COURTNEY, Sheriff, et al. DODGE et al. v. WILDES et al.
Judges: 
Reporter: West's New York Supplement
Volume: 23
Pages: 542–543

Head Matter:
(69 Hun, 152.)
KINGS COUNTY BANK v. COURTNEY, Sheriff, et al. DODGE et al. v. WILDES et al.
(Supreme Court, General Term, Second Department.
May 8, 1893.)
1. Secret Partnership—Rights op Creditors.
Where a creditor advises a debtor to form a partnership, but to continue business in her own name, and such partnership is formed, but the fact is not made public, and persons not knowing of the same sell goods to the partner in whose name the business is carried on, the creditor who advised the formation of the partnership, and has his judgment against the same, will have no right to collect such judgment out of the firm’s assets, in preference to the judgments of the other creditors against the person in whose name the business was carried on.
3. Chattel Mortgages—Filing—Bill op Sale to Secure Debt.
Under Laws 1833, c. 279, providing that every mortgage or other conveyance intended to operate as a mortgage of chattels, which is not followed by a change of possession of the chattels, shall be void, as against creditors of the mortgagor, unless the mortgage, or a copy thereof, shall be filed, a bill of sale given as security for a debt must be filed, unless it is followed by immediate delivery of the property.
Appeal from special term, Kings county.
Action by the Kings County Bank against John Courtney, sheriff, and William E. Dodge and others, judgment creditors, to determine the rights of parties to funds in the hands of the sheriff. Judgment was rendered in favor of defendants the Tremont National Bank of Boston and Thomas Wildes, and the plaintiff and the defendants Phelps, Dodge & Co. appeal.
Affirmed.
Argued before BARNARD, P. J., and DYKMAN and PRATT, JJ.
Norman S. Dike, for appellant Kings County Bank.
Edmund Coffin, Jr., for appellants Phelps, Dodge & Co.
William J. Courtney, for respondent John Courtney.
John P. Hudson, (C. Donohue, of counsel,) for respondent Thomas Wildes.
Henry R. Willis, for respondent Tremont Nat. Bank.

Opinion:
BARNARD, P. J.
The plaintiff has no rights above the other claimants by reason of a partnership between Gulia Brandéis and her daughter Maria. The mother was carrying on a business, manufacturing lead pipe, under the name of the "Brooklyn Lead Pipe & Trip Works." The ostensible name in which the business was carried on was "G. Brandéis, Proprietor." On the 2d of June, 1890, Gulia Brandéis made a bill of sale to the plaintiff of certain of the personal property of the business. On the 7th of August, 1891, Gulia Brandéis entered into a partnership agreement for three years with her daughter Maria. The agreement provided that the business should be conducted in the name of the mother as proprietor, and that the account in the bank should be kept in the mother's name, but with a right on the part of the daughter to sign her mother's name to checks, with the addition of the initials of her own name. The partnership agreement was not publicly known. It was known to the plaintiff bank, but no notice was given by the bank of the partnership between mother and daughter. It was proven, also, that the bank requested that the partnership be formed, which was well enough, but the keeping it secret so as to obtain an advantage over other creditors was not well done. The partnership was at least a dormant one, under North v. Bloss, 30 N. Y. 374. It was not necessary for persons who sold the apparent owner, Mrs. Brandéis, to make her daughter a defendant with her. The bill of sale was properly found of no force as against judgment creditors. The form of the instrument is subject to the real purpose of the paper. This is found to be that the bill of sale was given as security for the loans then at its date made by the plaintiff, and to be made thereafter. Chapter 279, Laws 1833 , applies to it, and it should have been filed as directed by that statute; otherwise, it was void as against creditors and subsequent purchasers in good faith. The statute of frauds, against bills of sale of personal property by a vendor of goods, who does not give immediate possession, applies. The bill of sale is presumed void, and there is an entire absence of proof of good faith,—that the paper was made in good faith, and without an intent to defraud creditors. As the proof is so strong that the bill of sale was not intended as an absolute transfer of title, but was by way of mortgage, this question need not be discussed. With the partnership and the bill of sale in operation, the plaintiff is not entitled to precedence over these creditors who get their levy on the property by means of execution delivered before the plaintiff commenced the proceedings by attachment, which finally resulted in judgment against the mother and daughter as partners.
Phelps, Dodge & Co. issued their execution, and made levy, on the 17th of February, 1892; the Tremont Bank, on February 19, 1892, which subsequently matured in a judgment. The trial court has found that the execution of Phelps, Dodge & Co. became dormant, and lost its precedence thereby. The case shows that, after the Phelps, Dodge & Co. execution was levied, Mrs. Brandéis applied to that firm to take $2,000 on account, and withdraw the sheriff from her works. An arrangement was made that $2,000 was to be paid, and the execution and levy withdrawn and released. Notice was given to the sheriff by Phelps, Dodge & Co.'s attorney on the 18th of February, 1892. The agreement of Mrs. Brandéis, who carried the letter to the sheriff, gave a check to him for his fees, which was unpaid. On the 20th of February the sheriff wrote Phelps, Dodge & Co. that he had received his fees on the basis of $1,000 payment, and asking for a continuation of the execution. On the 23d of February, 1892, Phelps, Dodge & Co. wrote the sheriff to hold the levy until instructed to the contrary. There was no proof of fraud, beyond a general statement of her responsibility. Notes were to be given for the balance of the debt, which presumably were given. The subsequent direction to hold the levy was not a part of the settlement, and was unjust as to the judgment debtor. The execution was properly found to be dormant, and the judgment should be affirmed, with costs. AE concur.
This section provides £or the filing o£ chattel mortgages.