43 N.Y.S. 1012 | N.Y. App. Div. | 1897
The complaints were dismissed at the.trial on the motion of the defendants without any evidence being taken. The two actions-were, by order of the court, consolidated and to be tried as 6ne upon their respective pleadings already made. The amended complaint in the action against Sophia and Isabella Schwab alleged that, on and prior to July 17, 1894, the defendant company was a domestic manufacturing corporation; that on July 25, 1894, in pm .action in the Superior Court, New York, wherein Frank King was-plaintiff and the defendant company was the defendant, plaintiff was, by order, appointed temporary receiver of the property of the defendant company, and duly qualified as such and executed and filed his bond," as required by the order; that on the 14th of September, 1894, by the final decree in the same action, plaintiff was appointed permanent receiver of the defendant company, and is now acting as such receiver; that on July 17, 1894, the defendant company confessed judgment to one Edward- P.' Hatch, and under such judgment and an execution issued thereon Hatch took possession of the tangible assets of the defendant company and caused them to be sold at auction; that on July 16, 1894, the defendant company, while insolvent and in contemplation of insolvency, and with intent to give á preference to the defendant Sophia Schwab, paid to her $5,950 ; that at the time of such payment Sophia Schwab was a shareholder and otherwise interested in. the corporation ; that on July 16, 1894, the defendant company, while insolvent and in contemplation of insolvency, and with intent to-give a preference to the defendant Isabella Schwab, paid to her $13,500 ; that at the time of such payment Isabella Schwab was a shareholder and otherwise interested in the corporation; that when these paym.ents and preferences were made the corporation had refused payment of its notes and other obligations, and such pay-
The complaint in the action against Ada Schwab was of similar import, except that the property transferred to this defendant was alleged to be the notes of third parties, of the value of $2,500, and there were some other allegations in the complaint not found in the former one referred to.
It was upon these complaints that the motion to dismiss was made. ‘The ground upon which the court granted the motion and dismissed the complaints was that the causes of action were not equitable in their nature, but were merely for money paid and received in violation of a statute. This was not a sufficient ground for the dismissal ■of the complaints. It is' well settled that this question must be raised by answer or demurrer, and cannot be raised for the first time at the trial. (Town of Mentz v. Cook, 108 N. Y. 504; Ostrander v. Weber, 114 id. 95, 102; Hyatt v. Ingalls, 124 id. 93, 105; Watts v. Alder, 130 id. 646-648; W. 8. Bank v. Town of Solon, 136 id. 465, 473; Lough v. Outerbridge, 143 id, 271-276.)
These cases, we think, lay down the rule clearly applicable to this. ■case. Other eases are cited by counsel, but they are distinguishable from this case and the cases above cited, and, we think, are not applicable here. There was a waiver by the defendants of the right to try .these actions as actions at law by the failure to raise the question by demurrer or auswer.
We think, moreover, that the learned trial judge erred in holding that the causes of action alleged in the complaints were not equitable in their nature. The actions were brought to set aside illegal transfers of trust property and to recover such property. The transfers were not only alleged to have been made in contravention
An action to set aside such illegal transfers made in contravention of the statute and in fraud of creditors, and to reco ver -such - assets-, presents well-recognized subjects of equity - jurisdiction. In this case the property transferred was money and notes, but the plaintiff was entitled to the ¡same relief as in case pf the transfer of real estate or personal property' other than moneys and -notes. The relief asked for was entirely- proper. 1. That the transfers of the money and the notes be declared . void. 2. That the money and notes be accounted for ¡and turned over by the; defendants to the plaintiff. 3. That the .plaintiff hold the money-.and property subject to the order of the court. 4. That injunctions be granted restraining-defendants from disposing of the property. 5. For such further-relief as might be just and equitable. If these actions had related to real property or specific articles of personal property, it could not be doubted that the suits were properly in equity. - There -.can- be-no-distinction by feason-of the property being money and notes. The-plaintiff could not be limited to a money judgment against the defendants; The actions and the relief ¡sought therein were in théir nature -equitable, and the court having taken jurisdiction ’ of the actions as equitable, was not justified in dismissing the1, complaints, even if it appeared that the only relief practicable was the awarding-of money judgments. It vras said in Dudley v. Congregation, etc. (138 N. Y. 459), “ When facts are made out which bring (he case within the. general jurisdiction of equity, the court will no( allow the case to fail, because the specific relief , prayed for is no longek practicable, but in Such a case, as a substitute for the relief demanded, will award an equivalent in damages, thus ending the controversy, instead, of sending the. parties, td®.-court of law for that purpose.”' (Citing Valentine v. Richardt, 126 N. Y. 277; Lynch v. M. E. R. Co., 129 id. 274; Van Rensselaer v. Van Rensselaer, 113 id. 213.)
Our conclusion is that the judgment appealed from should be reversed and a new trial ordered, with costs to the appellant to abide event.
Van Brunt, P. J., Patterson, O’Brien and Ingraham, J J., concurred.
Judgment reversed, new trial ordered, costs to appellant to abide event.