LILIENTHAL V. WAI,LACH.
«(Ji'I'cuit Court, S. D. New York. Ja,:quary 8,1889.)
Upon proceedings supplementary to execution. although a third party. having propertl of the judgment debtor which the third party claims as his own, may be pUDlshed for contempt in disposing of it, where his claim appears from the evidence to be so transparent a sham as not to constitute a 'substantial dispute" as to title. under section 2447 of the New York: Code of Procedure. yet the court will hesitate to adjudge summarily a considerable demand upon a motion for contempt; and in this case. a denial of the motion was directed. provided the claimant deposited the proceeds or gave security for the payment of whatever might be recovered in an action to be brought by the r,eceiver of the judgment debtor against him. .' (Syllabus by the Court.)
In Equity. Motion in supplementary proceedings to punish for con. tempt. Frank E. BlachveU, for plaintiff. Louis .O. Van DMen aud Oharles Donohue, for defendants. BROWN, J. Section 2447 of the New York Code of Procedure permits the judge upon supplementary proceedings to order a third person having property or Jl10ney of the judgment debtor to payor deliver the same to.the of the judgment debtor, unless the right to the same is "substanti81ly disputed." By a substantial dispute I understand some bona fide controversy. It cannot include a mere colorfible dispute, signed only to render the law ineffective, and to defeat the direct remedy which the proceedings supplementary to execution are designed to afford. In this case the evidence leaves no doubt that the day before the supplementary order was served on Drucklieb he had 24 cases of goods longing to the judgment debtor. On that day a bill of sale was executed and delivered, antedated to the 1st August the judgment debtor's attorney in fact, whereby this property and other property were conveyed to Drucklieb in consideration of $100. Drucklieb testifies that an additional consideration was the cancellation of an indebtedness to him for previous commissions amountilig to about $2,000. Even this exphmatioh does not make the consideration one-fifth of the valUe of the property transferred. Without going into the numerous details, the whole history of ,the transaction is such that if the court were to pass upon the evidence presented it would not hesitate to consider the alleged sale a transparent sham. It has not the appearance of even a colorable bona fide claim, on the part of Drucklieb; and in this view the court would be justified in treating the case as not one of "substantial dispute" within the meaning of section 2447. So great, however, is my reluctance to pass summarily upon a question of this kind, involving so considerable an amount, upon a motion to punish for contempt, that I shall decline to grant the motion, provided the defendant, within a time to be determined on Bettlement of the order herein, shall either deposit in court. v.37F.no.6-16
.; : FEDERAl<
the proceeds of these goods, which were sold by him after the suppleor, in lieu thereof, shall execute a bond mental order was serv,e4 on with approved security to pay any judgment that may be recovered in an action to qy the receiver 9f the judgment;debtor for such proceedsj otherwise, the motion for contempt will be granted.
TRUST . Co. 'V. EAST
R. Co. et al.
(OircuitOourt,N. iJ,4labama, 8. D. January 11, 1889.)
Intervenor filed a bill against a railway company to judgment, based on his claim for building parts of the road, declared a first lien on portions of the road, for an accounting of the valid indebtedness of the company, and for foreclosure;ofdeeds of tl'ust,giveribythe company..Oomplainant, as trustee under the deeds of trust, demurred to intervenor's bill, and afterwards filed'a bill to foreclose the deeds of trust. The suits were collsolidated by order of court, and the parties called complainant and intervenor; respectively.. The intervenor .tiled a plea of lis pendens'to 'complainant's bill. Held that,Aside from the order of consolidation, the plea was insufficient. because, although intervenor asked for an account and marshaling of assets and foreclosllt:e of some deeds of 'trust. yet' there coul:d 1)'e no foreclosure under intervenor'8 bill ". unless comphl.;inant filed· a crose·bill for that purpose., , ' : .
. . '., .
OF LIS PENDENS.
Under Const, Ala. at:t.14.&4, providing that no "foreign corporation shall , do any business in this state withdut having at least one knbwn place of busi· ness, and an authorized agent; !!.though the complainant. a trust company of Ne'Y: doe.s, busi,!Hlss in,A!ablima without having a knownplaQe,of business or authOrized agent, its contracts made in the state, and relating to Alabama property. are not 'but voidable, and a'plea in bar to complain· ant's foreclosure suit, bllsedon such constitutional provision, is insuBicient.
demurrer andiWeas. for cOPlplainant. Tili'1TJ,an,. Jor
PARDEE, J.\On the 13th of March, 1888, James W. Schley, aeitizen ,of Georgia, bro.ught his bill against the East & West Railroad Company the American Trust Company etal., and therein he. had beena,cpnt,ractor for the building of certain por.tion.B E;ast&;,WestRailroad Company of Alabama,. and ,that for the am.ouIj.t due him c:m, the construction of a certa,in portion of ,the. line he had recovered a judgment against said railroad company in the circuitcQurt .of Cherokee county, Ala., for the sum of $13,760 and costs of suitjthat. said judgment was wholly due and unpaid; that said .raHroad compll.I1Y was insolvent; and that complainant was unable, by process of execution, to collect hisjudgment. He further averred that ,about.jhe cpnstructionofjts line, and the maintenanoe thereof, Railroad Oompany of Alabama had contracted and the.said :illsued 8 QOJ;ldE!d indebtedness for about $1,100,OOO,known as the "First ¥Qrtgage Bonds" of said. rajlroadcompany, .w hieh said bonds were se-