Citations
- 56 A.D. 43
Full opinion text
McLaughlin, J.:
This action, by two judgment creditors of the National Silk Label Company, was brought to set aside a bill'of sale made by the National Silk Label Company, a foreign corporation, to the firm of William W. MacFarlane & Co., upon the ground that it was fraudulent and void,, having been given with intent to hinder, delay and defraud cred-.itors, and to compel the defendant, the Garfield National Bank, to account for the proceeds derived from a sale of the property covered by such bill of sale under an execution issued upon a judgment which it had obtained against MacFarlane & Co. . The plaintiffs had a judgment setting aside the bill of sale and directing the Garfield National Bank to account for the proceeds derived from the sale under its ■execution to all of the creditors of the silk label company. From this judgment the plaintiffs and the Garfield National Bank have ■appealed, the plaintiffs upon the ground that they are entitled to a preference over the other creditors of the silk company, and the Garfield National Bank upon the ground that, by virtue of its levy and sale and the payment over of the proceeds of the property sold under the execution, it is entitled to hold the same irrespective of the other creditors of the silk company.
There is no dispute between the appealing parties as to the material facts involved in the subject-matter of the litigation. These facts are substantially as follows: On and for some time prior to the 25th of April, 1896, the firm of William W. MacFarlane & Co. was engaged in manufacturing “ gum silk,” and, for the purpose of utilizing the same, the members of MacFarlane, & Co. or the relatives ■of their families organized, under the statutes of New Jersey, acor- ■ poration, the National Silk Label Company. The business of the ■corporation and.of the copartnership was carried on separately, but in the same building, and both had offices at 81 Grand street in the ■city of New York. On the 25th of April, 1896, the copartnership and the corporation were insolvent and unable to meet their maturing obligations, including certain notes held by the plaintiffs and the Garfield Bank. On that day the silk label company executed to MacFarlane & Co. a bill of sale of its personal property, the consideration of which was the sum of $1 and the assumption by MacFarlane & Co. of all the debts of the silk company. On the following Monday, April twenty-seventh, MacFarlane & Co. made a .general assignment for the benefit of creditors to one .Richardson, ‘who took possession of the property assigned, which included certain personal property at 81 Grand street in this city. On the twenty-ninth of July following the Garfield National Bank obtained •a judgment against the firm of MacFarlane & Co. for $14,759.95, upon which, on the eleventh of September, it caused to be issued and delivered tc the sheriff of the county of New York an execution, under and. by virtue of which he levied on that day upon certain goods which tile silk company, on the twenty-fifth of April previous, had at 81 Grand street, and which, on that day, by the bill of sale above referred to, it sold and delivered to MacFarlane & Co.. Under the levy thus made the goods, on the twenty-ninth of September, .were sold, and the proceeds of the sale, amounting to $12,875, were paid to the Garfield Bank to apply on its judgment.
- Oh the 22d of September, 1896, one of the plaintiffs, the National Broadway Bank, brought an action to set aside the general assignment made by MeFarlane & Go. upon-the ground that it was made with intent to hinder, delay and defraud creditors, and, after a trial had, the same was, on the 20th of July, 1897, set aside, but nothing was realized by the plaintiff under the judgment thus obtained. . On the 6th of November, 1896, this action was brought by the National Broadway Bank — in which the Standard National Bank subsequently joined—-which, after a trial, has resulted in the judgment, appealed from.
Upon the appeal from such judgment the plaintiff banks contend,, as they did in the court below, that by the commencement of this-action they acquired an equitable lien upon the property of'the-silk company, or so much of it as is necessary to satisfy their claims. Their contention.is that the bill of sale by the silk company to MacFarlane & Go. was void; that the assignment by MacFarlane