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DEGNON v. COOK & WILSON'S GREATEST WILD ANIMAL CIRCUS ON

EARTH.

(Supreme Court, Appellate Term, First Department. January 16, 1917.) COURTS C12(3)— MUNICIPAL COURT-JURISDICTION-FOREIGN CORPORATION

CONSTITUTIONAL PROVISIONS,

Municipal Court Code (Laws 1915, c. 279), authorizing actions against foreign corporations without imposing the condition that such corporations have an office in the city of New York, as required by the former Municipal Court Act (Laws 1902, c. 580), does not violate Const, art. 6, § 14, providing that jurisdiction of the county courts shall not be so extended as to authorize an action therein for the recovery of money only, in which any person not a resident of the county is defendant, as the Legislature was not bound to contine the jurisdiction of local inferior courts to actions against residents of the counties so long as jurisdiction of the persons could be obtained within the territorial jurisdiction of the court, so that the Municipal Court had jurisdiction as to a nonresident defendant corporation, having no office in the state, but doing business in the state, so that the courts of state under Code Civ. Proc. § 1780, providing when corporations may be sued, would have jurisdiction of the subject-matter of the action.

[Ed. Note.-For other cases, see Courts, Cent. Dig. $ 33; Dec. Dig. w12(3).] Appeal from Municipal Court, Borough of Manhattan, Third District.

Action by George H. Degnon against Cook & Wilson's Greatest Wild Animal Circus on Earth. From denying a motion to vacate a warrant of attachment, defendant appeals. Order affirmed.

Argued November term, 1916, before LEHMAN, WHITAKER, and FINCH, JJ.

Joseph V. Mitchell, of New York City (James C. Madigan, of New York City, of counsel), for appellant.

O'Brien, Malevinsky & Driscoll, of New York City (Arthur F. Driscoll and Alfred G. Steiner, both of New York City, of counsel), for respondent.

LEHMAN, J. The defendant herein has appeared specially to move to set aside the service of the summons and complaint herein and to vacate a warrant of attachment granted herein. Originally he asked this relief on the ground that the papers on which the attachment was granted are fatally defective. The defendant contended, in effect, that the action is against a foreign corporation, and the papers fail to show that the plaintiff is a resident of the city or state; that the cause of action arose here; that the defendant maintains an office in the city or state; and that it does not appear from the original papers that the court has jurisdiction of this action against the foreign corporation. The justice who heard this motion held that the plaintiff is a resident of the city of New York, and therefore denied the motion. We need not now consider the correctness of the decision of the motion made on the ground that the original papers are defective for the defendant did not appeal from that order, but instead, made a new motion on affi

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

davits for the same relief. It now appears undisputed that the plaintiff is not a resident of the state, that the defendant is a foreign corporation which maintains no office in the state, and that the cause of action did not arise within the state. The defendant also claims that it transacted no business within the state, but the plaintiff alleges to the contrary, and for the purposes of this appeal we may consider that the defendant is doing business in this state, and that therefore, under section 1780 of the Code of Civil Procedure, the courts of this state may take jurisdiction of the subject matter of the action. The only claim of the defendant that now merits serious consideration is that under the former Municipal Court Act, before the enactment of the Municipal Court Code, an action against a foreign corporation could be brought only where the corporation had an office in the city of New York, and that the provision of the Municipal Court Code, which authorizes actions against foreign corporations without imposing such a limitation, is unconstitutional, in that it confers upon the Municipal Court greater jurisdiction than is conferred upon County Courts, in contravention of section 18, art. 6, of the Constitution.

Article 6, § 14, of the Constitution provides that the jurisdiction of the County Courts shall not be so extended as to authorize an action therein for the recovery of money only, in which the sum demanded exceeds $2,000 or in which any person not a resident of the county is a defendant. The Court of Appeals, in the case of Worthington v. London G. & A. Co., 164 N. Y. 81, 58 N. E. 102, and in the case of Routenberg v. Schweitzer, 165 N. Y. 175, 58 N. E. 880, held that, in spite of these provisions of the Constitution, the Legislature had power to confer jurisdiction upon the Municipal Court in actions against nonresident persons or corporations having a place of business in the city. It held in those cases that, since the Municipal Court was a continuation and consolidation of the old district courts, the Legislature had power to continue in the consolidated courts all the powers previously exercised by any of the district courts. While that case is usually cited only as authority for the proposition that the Municipal Court is not a new court, but the consolidation of previously existing courts, the case also squarely holds that the framers of the Constitution"were not dealing with the jurisdiction of these future courts as to territory, non resident parties defendant or foreign corporations."

The Court of Appeals, in the earlier case of Landers v. Staten Island R. R. Co., 53 N. Y. 450, had held the converse of this proposition. In that case the court had under consideration article 6, § 12, of the Constitution as amended in 1869, which continued in existence certain specified local courts with the powers and jurisdiction they then had, "and such further civil and criminal jurisdiction as may be conferred by law.” Subsequently the Legislature attempted to confer upon these courts jurisdiction throughout the state, and to confer upon the courts power to send their summonses and process throughout the state. The court held that this statute was unconstitutional, that the courts affected were local courts, and that when the Constitution speaks of "further civil and criminal jurisdiction, it has respect to the object of the jurisdiction, and not to the territory or the persons of suitors," and it did not thereby authorize the Legislature to change a local court into a court of general jurisdiction. In the subsequent case of People ex rel. Townsend v. Porter, 90 N. Y. 68, the court held that the power to create inferior local courts referred simply to local courts as historically known; that is, courts.established within one of the recognized territorial divisions of the state, county, town, city, or village. In the later case of Worthington v. London G. & A. Co., supra, the majority of the court stated that these cases had been decided before the Constitution of 1894 was framed"and the convention deemed it wise to place an additional restraint upon the Legislature when defining the powers of inferior local courts, to be exercised within their territorial limits, and hence we have the provision of the Constitution already quoted, which prohibits the Legislature from granting 'any greater jurisdiction in other respects than is conferred upon County Courts by or under the article.'”

In other words, as I construe that case, the court held that when the Legislature created the greater city of New York, it had a right to consolidate, into a court with jurisdiction coterminous with the boundaries of the new city, the local courts existing in the various sections of the city, and to confer on the consolidated court the same jurisdiction which had been possessed by any of the former courts, or to confer new jurisdiction subject to two limitations: First, it could not be given powers to act beyond the boundaries of an established political subdivision of the state; second, it could not be given jurisdiction greater than the county courts had over the defendants properly brought into those courts. The Legislature was not, however, bound to confine the jurisdiction of the local inferior courts to actions against residents of counties, or even to residents of some other political subdivision of the state, so long as jurisdiction of the persons could be obtained within the territorial jurisdiction of the court.

Order should be affirmed, with $10 costs. All concur.

COWEN Y. GRUBER et al. (Supreme Court, Appellate Division, First Department. January 12, 1917.) 1. CONTEMPT Cm 24-FAILURE TO TURN OVER GOODS.

Where a sale in bulk was made, and action by the vendor's trustee in bankruptcy against the buyer was not started for three months after the buyer had sold the goods at public auction, and judgment was not entered for the trustee until nine months thereafter, the buyer could not be punished for contempt for failure to turn over the specific goods.

[Ed. Note.--For other cases, see Contempt, Cent. Dig. 88 71-74; Dec.

Dig, Cw24.] 2. EXECUTION JUDGMENT ENFORCEABLE BY.

Judgment, in favor of the trustee in bankruptcy of a vendor of goods in bulk against the buyer, ordering that the buyer was a receiver for the benefit of the trustee of the stock of merchandise, and that he turn over such merchandise or account for its value to the trustee, was a final judgment, and could be docketed and enforced by execution under Code Civ. Proc. § 1240, prescribing when judgment may be enforced by execution.

(Ed. Note.-For other cases, see Execution, Cent. Dig. 88 7–15, 17–20; Dec. Dig. ww 7.)

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

3. CONTEMPT 25-FAILURE TO PAY MONEY.

Since such judgment required payment to the trustee, and not into the court, or to an officer of the court, Code Civ. Proc. § 1241, prescribing when a judgment may be enforced by punishment for disobeying it, had no application.

[Ed. Note.–For other cases, see Contempt, Cent. Dig. $$ 75-78; Dec.

Dig. 25.) 4. FRAUDULENT CONVEYANCES Cm182(5)—BULK STOCK SALES-PURCHASER AS

RECEIVER FOR CREDITORS.

Code Civ. Proc. § 1890, making persons named therein public officers within the meaning of section 1888, has no application to the case where the buyer of goods in bulk disobeys the judgment of the court, in the suit against him by the vendor's trustee in bankruptcy, ordering him to pay the value of the goods to the trustee.

[Ed. Note.—For other cases, see Fraudulent Conveyances, Cent. Dig. SI

575, 576; Dec. Dig. Eww182(5).] 5. CONTEMPT Om 10-PURCHASER OF STOCK IN BULK AS RECEIVER.

Personal Property Law (Consol. Laws, C. 41) $ 44, as amended by LAWS 1914, c. 507, provides that any purchaser of a stock of goods in bulk, who shall not conform to the provisions of the section, shall, upon application of the creditors of the seller, become a receiver, and be held accountable to such creditors for all the goods that have come into his possession by virtue of the sale. Held, that the language used did not bring the purchaser of a stock of goods in bulk within Judiciary Law (Consol. Laws, c. 30) $ 753, subds. 1 or 8, providing what contempts may be punished civilly, so that the purchaser of a stock of goods in bulk, who disobeyed a judgment, in an action against him by the vendor's trustee in bankruptcy, requiring him to pay the value of the goods to the trustee, was not punishable for contempt at the trustee's instance, since such intention on the part of the Legislature should have been more clearly expressed in the statute than by the mere use of the word "receiver."

(Ed. Note.-For other cases, see Contempt, Cent. Dig. $S 19-22; Dec. Dig. Om 10.] Appeal from Special Term, New York County.

Action by A. Frank Cowen, trustee in bankruptcy, against Samuel L. Gruber and others. There was judgment for plaintiff, and his motion to punish defendant Gruber for contempt in failing to obey it was denied, and he appeals. Affirmed.

The following is the opinion of Finch, J., in the trial court:

[1, 2] This is a motion upon an order to show cause why the defendant should not be punished as for a contempt of court. When this motion originally came on, I was of the opinion that the same should be granted, and handed down a memorandum to that effect. A motion was then made for reargument, which I grant, and, having gone into the matter more fully, I am convinced that the original motion should be denied. The matter is not free from doubt, since it falls within that line of cases where the legislative intent is not clearly expressed, and it devolves upon the court to say what the legislative intent was. After a trial, a sale made in bulk was set aside as void as against the plaintiff (a trustee in bankruptcy for creditors) under what is known as the “Bulk Sales Act," being now section 44 of the “Personal Property Law” (as amended by Laws 1914, c. 507). The judgment upon this trial “ordered, adjudged, and decreed

that the defendant is a receiver for the benefit of the plaintiff, as trustee for creditors of Salzman and lery, of the said stock of merchandise that came into his possession by virtue of the said sale and transfer; that the defendant Samuel L. Gruber do forthwith convey, pay, and deliver and account for to the plaintiff of the property received by him, as aforesaid, or its value, in the sum of $2,500." The deen For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

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fendant sold the goods at public auction on the 21st of September, 1915, and this action was not started until January, 1916, and judgment entered July, 1916; or, in other words, this action was brought long after the defendant had sold the goods for which by the terms of the judgment he must now account, and long after the defendant had finally parted with the possession of the goods. Because of these facts the defendant cannot be punished for contempt for failure to turn over the specific goods. There is also no proof that there is any specific moneys in defendant's hands which belong to the plaintiff. Thereafter this motion was made upon the final judgment to punish the defendant by imprisonment as for a contempt. This judgment finally determines the issues between the parties, and is a final judgment, and may be docketed and enforced by execution. Code Civ. Proc. 1240; Rankin v. Sacchi, 16 Abb. Pr. 368; Geery v. Geery, 63 N. Y. 252; French v. French, 107 App. Div. 107, 94 N. Y. Supp. 1026; Geery v. Geery, 79 N. Y. 565.

[3] In addition to being enforceable by execution, this judgment requires payment to the plaintiff, and not into the court, or to an officer of the court, and hence section 1241 of the Code is not applicable.

[4] Section 1890 of the Code, also relied upon by the plaintiff, is obviously not applicable, since it only makes persons therein named public officers within the meaning of section 1888 preceding.

[5] We are thus brought to a consideration on the real question on this motion, which is whether section 44 of the Personal Property Law is sufficient to bring this defendant within the category of a receiver appointed by this court, and over whom this court has summary jurisdiction and may punish for contempt for failure to pay over moneys intrusted to such receiver. The language applicable to section 44 of the Personal Property Law is as follows: "Any purchaser, transferee or assignee who shall not conform to the provisions of this section shall upon application of

the creditors of the seller, transferer or assignor become a receiver and be held accountable to such creditors for all the goods, wares, merchandise and fixtures that have come into his possession by virtue of such sale, transfer or assignment.

Does this language used by the Legislature bring this defendant within subdivision 1 or 8 of section 753 of the Judiciary Law, which provides what contempts may be punishable civilly? In short, is this defendant in the same category as the usual receiver appointed upon the selection of the court, and therefore held amenable to the summary process of the court? This question does not seem to have been, as yet, adjudicated. When the Legislature employed the word "receiver" in section 44 of the “Personal Property Law," did it mean to emphasize that this defendant should be held accountable for the value of the goods received by him, or did it mean to give him all the attributes of a receiver appointed upon the selection of the court? If it is held that the mere use of the word "receiver" would make this defendant liable to be punished as for a contempt of court, then it follows that he has all the other rights and obligations pertaining to a receiver appointed upon the selection of the court. If he is liable as for a contempt of court, then it follows that a creditor who sold his goods upon credit of the debtor and between whom and the debtor there existed the relationship of creditor and debtor only, may be able to obtain payment of the whole or a part of his debt against the purchaser in bulk from the debtor by imprisonment.

It has, however, already been held that a creditor cannot arrest the debtor for making such sale on the ground that this fraud is a mere constructive fraud, and is not such a willful intent to defraud as to enable the creditor to have an order of arrest against the debtor. Mann v. Chrestopulos, 87 App. Div. 222, 84 N. Y. Supp. 372.

One of the reasons which countenances the summary jurisdiction over a receiver appointed upon the selection of the court is that the court has the power of selection. Under this statute, however, the court has no power of selection, and the person himself who is a participant in this constructive fraud must be made the receiver. To say that this defendant was appointed as receiver by the court in the sense that the ordinary receiver is appointed confuses terms. It must be presumed that the judgment of the court followed the statute, and that the receiver was appointed because of the statute, and not upon the selection of the court. When there is no choice there is, in the

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