87 A.D. 576 | N.Y. App. Div. | 1903
In 1895 the plaintiff in this action entered into two contracts with M. Gibbons & Son, by which the latter undertook to construct two warehouses for the former, at an aggregate cost of $151,000. The firm of M. Gibbons & Son originally consisted of Michael Gibbons and Bichard Gibbons, his son, one of the defendants in this action. The buildings were completed about July 2, 1896, and shortly thereafter Michael Gibbons and Bichard Gibbons began an action against the plaintiff in this action to recover the sum of $56,000, the unpaid balance of the contract price for the erection of said buildings. The original complaint claimed a considerable sum for extra work, but this was dropped upon- the trial, and the litigation, after passing successively through the Appellate Division and the Court of Appeals, resulted in a judgment or judgments against the plaintiff aggregating at the time of the commencement of this action, with interest, $79,640.78. Several claimants appearing and demanding this money under assignments or otherwise, the plaintiff brought this action, in the nature of a-bill of interpleader, and has been permitted by the court to deposit the amount to the credit of the action, and has been dismissed from further liability. All of the parties acquiesce in this, and the only questions raiséd by the
On the 25th of August, 1896, shortly after the commencement of the action by Michael Gibbons and Bichard Gibbons against the plaintiff in this action, Michael Gibbons died. The complaint in that action alleged that they were copartners, doing business under the firm name of M. Gibbons & Son, and after the death of the father the action was continued in the name of Bichárd Gibbons as surviving member of the firm of M. Gibbons & Son, the judgment being entered in that name and under that designation, and it continued in that form during all of the subsequent history of the case, Michael Gibbons left a last will and testament under date of August 14, 1896, which was duly admitted to probate in October of that year.. The will appointed Bichard Gibbons as executor, who qualified and entered upon the discharge of his duties. The will, among other things, contained the following clause,'upon which several of the claimants rest their demand for a reversal of the judgment. It reads as follows: “ Having heretofore conveyed to my son Bichard .Gibbons all of my interest in the business of M. Gibbons <fe Son, I hereby ratify & confirm such conveyance & bequeath to my said son Bichard Gibbons any interest which it may appear that I may have at the time of my decease in the said business of the firm of M. Gibbons & Son.” ■
It appears from the evidence that the firm of M. Gibbons & Son had, at the time of the death, of Michael Gibbons, a large number of contracts for buildings, which were being performed, and that the firm had already borrowed of various concerns considerable sums of money. Bichard Gibbons, acting in the capacity of surviving member of the firm, and as it was his duty, ho doubt, as executor of the estate in protecting its assets, borrowed other sums of money for the purposes of paying the debts of the firm and completing the contracts which had been entered into in the lifetime of Michael Gibbons, and the principal question to be determined upon this appeal is whether the creditors of the firm and of Bichard Gibbons as surviving member of the firm have a right to be reimbursed out of the fund which has been paid into court under the judgments, in the action of Bichard Gibbons as surviving member of the firm of M. Gibbons & Son, or whether the judgment creditors of Bichard
It does not appear necessary to review each of the several assignments involved in this appeal, for while there are variations in the facts, and some intervening transactions, they will all be found to respond to the principle laid down in the Durant Case (supra) and which accords with our own ideas of the equities here involved. During the lifetime of Michael Gibbons, and about the 8th of June, 1896, the firm of M. Gibbons & Son opened an account with the defendant the National City Bank, and immediately began to borrow money from the -said bank through the discounting either of the firm paper or that of persons indorsed by the firm. On the twenty-fifth day of August, the date of the death of Michael Gibbons, the firm of M. Gibbons & Son was indebted to the bank for a considerable sum of money, and this was increased between the date of the death of Michael Gibbons and the 10th day of July, 1899, at which time ¡Richard Gibbons, as surviving member of the firm of M. Gibbons & Son, made, executed and delivered to the bank an assignment of an interest in the judgment against the plaintiff to' the amount of $37,197. The indebtedness which this assignment was intended to discharge was, by the undisputed evidence, shown to be such as had been contracted during the lifetime of Michael Gibbons, and such was made necessary in completing the outstanding contracts, and making the assets of the firm available. These facts are found by the court, and they are not disputed. On the
Nearly one year after the first assignment to the National City Bank in July, 1899, and on the 4th day of May, 1900, William Keenan, one of the defendants in this action, recovered a .judgment against Bichard Gibbons individually, and on the 25th day of May, 1900, in proceedings supplementary to execution, the defendant Daniel E. Delavan was appointed receiver of the property and assets of the defendant Bichard Gibbons individually. November 14, 1900, the receivership was extended to the judgment of the appellant Audley Clarke, who urges upon this appeal that the property of the firm of M. Gibbons & Son was vested absolutely in Bichard Gibbons, and that the assignments of the several interests in the judgment which he had executed as the surviving member of the firm while under the injunction of the order in supplementary proceedings were Void. A similar contention is made on the part of the defendant Arthur T. Stoutenburgh, who has been elected a trustee in bankruptcy under proceedings instituted by petition on the 17th day of June, 1900, against Bichard Gibbons, personally.
It seems to us entirely clear that the judgment against the plaintiff never became the property of Bicliard Gibbons except as to what might remain after the discharge of the equitable claims of the creditors of the firm of M. Gibbons ■ & Son, and that Bichard Gibbons, as surviving member of the firm, - was never under any restraint in the proceeding supplementary to execution nor in the bankruptcy proceeding, both of these proceedings being directed aga/inst him personally, and it appears that the fund now in court is not. sufficient to meet all of the claims against the firm of which he was the surviving member. It is equally obvious, if the fund belonged to him in his capacity as surviving member of the firm, that he had an equitable right to make an assignment of a sufficient amount to meet the obligations of the firm, either to the National City Bank or any other creditor, legal or equitable, of M. Gibbons & Son.’ In fact, the entire question here presented is whether the fund now in court belongs to Bichard Gibbons .as surviving member of the firm of M. Gibbons'& Son. If it does, then there can be no doubt as to the correctness of the distribution which has been
The judgment appealed from should be affirmed, without costs.
Goodrich, P. J., Hirschberg, Jenks and Hooker, JJ., concurred.
Judgment affirmed, without costs.