91 N.Y.S. 292 | N.Y. App. Div. | 1904
Lead Opinion
The question presented on this appeal is whether this action is at law triable at Trial Term or in equity triable at Special Term. The complaint alleges that one Hyman Gattle was duly adjudicated a bankrupt, and the plaintiff appointed and qualified as trustee on the 24th day of August, 1903 ; that the defendant claimed to be a creditor of the bankrupt, and in the month of May, 1903, the bankrupt while insolvent had delivered to the defendant, an alleged creditor, a quantity of merchandise of the value of $2,200 as security for the alleged indebtedness; that at the time of said delivery the defendant had reasonable cause to believe that the bankrupt was insolvent, and that it was intended then to give the defendant a preference; that the plaintiff had duly demanded delivery of the said property and the defendant has neglected and refused to transfer or deliver the same or any part thereof, wherefore the plaintiff demands judgment for the sum of $2,200, with interest.
The answer is in effect a general denial of the material allegations of the complaint. Both parties noticed this action at Trial Term, and the case was placed on the calendar; whereupon the plaintiff made a motion at Special Term to transfer the cause from the Trial Term to the Special Term calendar, and from an order granting that motion the defendant appeals.
Section 968 of the Code of Civil Procedure provides as follows : “ In each of the following actions, an issue of fact must be tried by I a jury unless a jury trial is waived or a reference is directed :
“1. An action in which the complaint demands judgment for a I sum of money only.”
Section 969 provides that “an issue of law, in any action, and anl issue of fact, in an action not specified in the last section, or wherein! provision for a trial by a jury is not expressly made by law, must bel tried by the court, unless a reference or a jury trial is directed.”
This action is directly within subdivision 1 of section 968, for thel complaint demands a judgment for a sum of money only. No equi-l table relief is asked for, nor is equitable relief necessary to entitle the plaintiff to recover. The plaintiff’s cause of action is based upon!
The nature of the action brought for this recovery depends upon the judgment that will be required to vest the property or its proceeds in the trustee. Where real property has been conveyed by a bankrupt to a creditor to secure a title to the property in the trustee, a resort to a court of equity is necessary to declare void the deed or conveyance, or to compel the creditor to reconvey. Such an action is in equity, but where the property transferred is personal property, and no written instrument is required to be set aside and no equitable relief is necessary to enable the trustee to recover the property or its value from the creditor to whom it has been transferred, the action is one which, under the Code of Civil Procedure, must be tried by a jury.
The case of Houghton v. Stiner (92 App. Div. 171) is not an authority for the position that an action at law cannot be maintained by a trustee to recover the property or its value, transferred in violation of the Bankruptcy Law. Mr. Justice O’Brien, in the opinion in that case, after citing the provision of the Bankruptcy Law (supra), said : “ There is nothing in this language, nor is there any provision of the Bankruptcy Law which prescribes the remedy or the form of action that a trustee is authorized to maintain to enforce the rights invested in him by the section quoted.” The plaintiff in that case brought an action in equity for an accounting, and the precise question was whether a trustee in bankruptcy, who, by appropriate allegations and prayer for relief, seeks that remedy, can maintain the action in equity, or, as contended by the defendant, is exclusively confined to an action at law. It was held that he could maintain an action in equity, if necessary for the enforcement of the rights secured to him by the Bankruptcy Law, and attention
It follows that the order appealed from must be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.
Hatch and Laughlin, JJ., concurred; Van Brunt,P. J., and Patterson, J., dissented.
Dissenting Opinion
This action is brought by a trustee in bankruptcy to recover property of the bankrupt in the hands of the defendant, claiming that
The opinion of this court in the case cited covers the ground and is authority for the order made. It was followed by the court below. Its reasoning is in the direction of the doctrine that the trustee in bankruptcy must sue in equity.
The order should be affirmed.
Van Brunt, P. J., concurred in result.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.