152 N.Y.S. 944 | N.Y. Sup. Ct. | 1915
The complaint alleges that one George H. Yonngmann, a former partner of the plaintiff, is indebted to the plaintiff in the sum of $14,000 or more, which amount is due from said Yonngmann. It further alleges that subsequently to the time of the creation of the indebtedness the said Yonngmann entered into business in the city of Buffalo, and in the month of October, 1914, said Yonngmann became insolvent and entered into an arrangement with some of his creditors, under which the stock of goods in
The above is the actionable portion of the complaint and is followed by an allegation which is, of course, a conclusion of law, that the “ plaintiff has no adequate remedy at law, ’ ’ and that ‘ ‘ plaintiff will suffer irreparable injury and substantial damage unless the relief asked for in this complaint is granted,” and in connection with this, by way of explanation, it is alleged that “ if plaintiff first proceeds in an action at law, to place said claim against said Toungmann into judgment, there is danger that said sum be distributed among the creditors of said Toungmann to the exclusion of plaintiff, and it will then become necessary for plaintiff to commence many and divers separate actions against each of said creditors to recover back the moneys so distributed in which plaintiff is entitled to share.”
The relief demanded is an injunction to restrain the defendant from distributing any part or portion of the fund ‘ ‘ until the claim of the plaintiff as a creditor against said George H. Toungmann is lawfully determined, and that this court determine the validity of the claim of plaintiff against the said Toungmann and of all other claims of creditors and alleged creditors against the said Toungmann; and that said claims
'The defendant demurs to the complaint upon the grounds that it appears upon the face of the complaint that there is a defect of parties defendant, in the omission of George H. Youngmann therein mentioned, and John Johnson, as trustee, therein mentioned; and, upon the further ground that it appears upon the face thereof that the complaint does not state facts sufficient to constitute a cause of action.
It seems entirely clear that this demurrer'must be sustained. The fund is alleged to have come into the possession of John Johnson, as trustee, yet the action is brought against John Johnson individually, and the relief demanded is that the said John Johnson personally shall perform the duties of a trustee in respect to this fund. John Johnson personally is not alleged to have received this fund; the allegation is that he received it as trustee, and yet he is asked to account for it personally, while John Johnson, as trustee, is not before the court. Clearly, too, it is necessary to a disposition of this case that George H. Tonngmann should be a party; he has a right to be heard on the question of his liability to the plaintiff for $14,000, or any other sum. Assuming that this action could be maintained by a mere general creditor, the other creditors would have a right to have the question litigated between tl^e plaintiff and Mr. Tonngmann, and a court of equity would not proceed to judgment without his presence.
Does the complaint state facts sufficient to constitute a cause of action against the defendant, John Johnson1? It is alleged that the fund came into his hands as trustee. A cause of action against an individual is distinct from a cause of action against the same individual as a trustee or representative (United
But beyond this is the fact that a creditor at large cannot, under the rules governing equitable actions, reach the assets of his debtor without having first exhausted his remedies at law; he must, except in extraordinary cases, where it is impossible to pursue such remedy, reduce his claim to judgment and have the execution returned unsatisfied. Then, and then only, will a court of equity intervene to give him relief by reaching equities which an execution could not make available. Speaking of the. equitable rules which must be observed in a case of this character, the court in Ocean National Bank v. Olcott, 46 N. Y. 12, 18, say: “ One of them is, that before the equitable interests of a debtor can be reached in equity, all available legal remedies must be exhausted. It is not necessary to hold that such an action is, in strictness, a creditor’s bill, and that jurisdiction depends upon a technical'
At common law, Mr. Youngmann would have an undoubted right to pay any of his creditors to the exclusion of others, acting in good faith, and no fraud is suggested here. Just what equities the plaintiff would have against the creditors who have entered into the agreement alleged is not clear. There does not appear to have been an assignment for the benefit of creditors-generally; Mr. Youngmann has simply agleed with some of his creditors that he will permit the sale of his goods by a trustee and the pro rata distribution of the fund among these creditors. He has a right to pay them what he owes them, or to pay a group of them a part that he owes them, and, in the absence of a bankruptcy proceeding, no way suggests itself how the plaintiff can prevent the consummation of this purpose. Certainly under the complaint in "this action he is not entitled to the relief which he demands.
The demurrer is sustained, with costs.
Demurrer sustained, with costs.