178 A.D. 462 | N.Y. App. Div. | 1917
This is an action by the trustee in bankruptcy of Holbrook & Schaefer, Inc., to compel the defendants to account for property of the bankrupt corporation alleged to have been transferred by some of them as officers of the corporation and to have been received by the others when to their knowledge the corporation was insolvent and about to suspend business. All of the appellants with the exception of vom Saal were officers and directors of the corporation and he was the brother-in-law of Edward Schaefer.
It is contended that the demurrers should have been sustained on the ground that the plaintiff has not alleged that ' the corporation had defaulted in the payment of its notes or other obligations within the contemplation of the 1st sentence of section 66 of the Stock Corporation Law (Con-sol. Laws, chap. 59; Laws of 1909, chap. 61). That point, however, has been authoritatively decided against the appellants’ contention, for we held in Caesar v. Bernard (156 App. Div. 724) that the 2d sentence of the section relating to the conveyance, assignment or transfer of property
It is perfectly clear that the plaintiff alleges a cause of action against all of the defendants under these provisions of the statute, and his appointment dispensed with reducing the claims of the creditors to judgments. (Southard v. Benner, 72 N. Y. 424.) The plaintiff represents all of the other creditors of the corporation. On the facts alleged, by the express provisions of the statute the transfers of the property of the corporation were void and those who received it are bound to account to the creditors therefor. Likewise, by the express provisions of this statute the directors and officers concerned in the violation are liable to the creditors to the full extent of the loss sustained; and by the express provisions of section 91a of the General Corporation Law (Consol. Laws, chap. 23 [Laws of 1909, chap. 28], as added by Laws of 1913, chap.
The only possible question there can be, therefore, is with respect to the right to join all of the defendants in a single action; but in view of the statutory provisions I think it is quite clear that they may be so joined. The theory of the statutes is that the assets of a corporation constitute a trust fund for the benefit of its creditors (See Darcy v. Brooklyn & N. Y. Ferry Co., 196 N. Y. 99) and that its officers who dissipate them when it is insolvent or its insolvency is imminent and those who receive the property with notice and without parting with a valuable consideration must restore it to the corporation for the benefit of its creditors. (Cullen v. Friedland, 152 App. Div. 124. See, also, Cole v. M. I. Co., 133 N. Y. 164.) The complaint, therefore, presents but a single cause of action in equity to have the transfers declared void and to recover the assets of the corporation which have been transferred in violation of the statute, and it is immaterial that the defendants are not equally liable and that they were not all concerned in the same illegal transfers of the property of the bankrupt. (Brinkerhoff v. Brown, 6 Johns. Ch. 139; Hatch v. Heinze, 172 App. Div. 675; Stiefel v. New York Novelty Co., 14 id. 371; German American Coffee Co. v. Diehl, No. 2, 86 Misc. Rep. 547; affd., on Mr. Justice Page’s opinion at Special Term, 168 App. Div. 913.)
It follows, therefore, that the order should be affirmed, with ten dollars costs and disbursements.
Clarke, P. J., Dowling, Smith and Page, JJ., concurred.
Order affirmed, with ten dollars costs and disbursements.