Klein v. Maravelas

| N.Y. App. Term. | Mar 15, 1915

Per Curiam.

This action was brought to recover a personal judgment against all of the defendants. The defendants Sirrontis Maravelas and Nicholas Yarounes were indebted to the plaintiff for goods sold and delivered. These defendants then sold to the other defendant, Peter Maravelas, their stock of goods, fixtures and good will of their business. The parties to this transaction did not comply with section 44 of the Personal Property Law (Laws of 1909, chap. 45, as amd. by Laws of 1914, chap. 507). The plaintiff has recovered a personal judgment against all of the defendants.

It is only necessary to consider one question here, and that is — can a personal judgment be obtained under the statute (Laws’ of 1914, chap. 507) against the vendee except upon his failure to account for the property he has received! No procedure is prescribed in the statute by which it is to be enforced except that the vendee may be made a receiver at the instance of a creditor and accountable for all the goods received by him by virtue of the sale.

First it is to be noted that the statute does not make the vendee personally liable. Such a radical departure from the common and all prior statute law cannot be presumed. As the statute does not prescribe a method of procedure, the procedure under it must be assimilated to the procedure adopted in relation to other fraudulent sales. In other words, the creditor is relegated to the old and well known judgment creditor’s action (Code Civ. Pro. §§ 1871-1879, 3343, subd. 13) with such modifications as the statute may render necessary. In the action the creditor’s proof of fraud will consist .of proof that the statute had not been complied with. In the judgment creditor’s action, judgment must be first obtained against the primary debtor and the creditor’s remedies exhausted against him before the action can be maintained, and that action seeks only to compel the application of the debt- or’s property to the payment of his debts, while in this action, without regard to the solvency or insolvency of the primary debtor or the value of the goods purchased, it is sought to make the vendee personally liable for the full amount of the creditor’s claim. There is nothing in the statute to warrant it and it is repugnant to all our ideas of right and justice.

Judgment in so far as appealed from reversed with costs, and judgment directed in favor of the defendant Peter Maravelas, dismissing the complaint as to him, with costs.

Present: Jaycox, Aspinall and Kapper, JJ.

Judgment reversed, with costs, and judgment directed for defendant Peter Maraveles, with costs.