69 A.D. 423 | N.Y. App. Div. | 1902
This is a judgment creditor’s suit by George D. Patten against Francis D. Carley, Francis D. Carley.& Company, Mary G. C. Carley. and seven other defendants, composing the firm of Evarts, Choate & Beaman, to procure a judgment that certain notes, securities, claims and property in their hands should be declared to be the property of the judgment debtor Francis D. Carley, and, further, to procure the appointment of a receiver who should pay the plaintiff’s judgment out of the proceeds of such property. The action was commenced on September 19,1900. • Within less than two months thereafter, on November 17, 1900, .the judgment debtor,' Francis D. . Carley, was adjudicated a bankrupt. Ferdinand H. Wismer was, subsequently elected trustee of-the bankrupt estate, and upon his application an order has been made in the action, at Special Term, whereby he has been substituted as plaintiff in place of the original plaintiff, George D. Patten.' From this order the present appeal is taken.-
The appellant is described in the complaint as a foreign corporation created under the laws of the State of Delaware. It is a little difficult to perceive how any substantial right of such defendant is affected by the order appealed from, inasmuch as.it can make little or no difference to such a defendant whether the action is prosecuted by Mr. Patten or by the trustee in bankruptcy; but. assuming that the Delaware corporation has sufficient interest, to enable it to review the order by appeal, I am satisfied that the order was properly made and should be affirmed.
The circumstances under which a trustee in bankruptcy may enforce such a claim as that asserted in the present suit are clearly set forth in the opinion of the tFnited States Circuit Court of
The contention of the trustee in bankruptcy here is, that, inasmuch as any rights of George D. Patten, the original plaintiff in the judgment creditor’s suit, were acquired within four months before the commencement of the bankruptcy proceeding, they can inure only to the benefit of the bankrupt estate. Section 67, subdivision b, of the Bankrupt Act of 1898 expressly provides that whenever a creditor is prevented from enforcing his rights as against a lien created or attempted to be created by his debtor, who afterwards becomes a bankrupt, the trustee of the estate of such bankrupt shall be subrogated to and may enforce such rights of such creditor for the benefit of the estate. Tinder this provision, and the other provisions of the Bankrupt Act referred to by Judge Wallace, the trustee seems authorized to prosecute the same action which Mr. Patten was entitled to prosecute to avoid the transfer attacked in the complaint. The original plaintiff does not complain of the order allowing him to do so, but, as has already been pointed out, the only objection comes from the Delaware corporation, which appears to have been brought into the suit solely because its name was used by the bankrupt in the various transactions alleged to have been conducted by him for the purpose and with the intent of cheating, hindering, delaying and defrauding his creditors.
I think the order should be affirmed.
All concurred.
Order affirmed, with ten dollars costs and disbursements.
30 United States Statutes at Large, 565.— [Rep.