Kiendl v. Dubroff

Rich, J.: The plaintiff, trustee in bankruptcy of the defendant Abraham Dubroff, brought this action to set aside certain conveyances affecting the real and personal property of the bankrupt. The complaint alleges that Dubroff was adjudicated a bankrupt in February, 1909, and that the plaintiff was elected trustee on March 9,1909. The conveyances complained of were all made by the bankrupt more than eight months before the adjudication of bankruptcy. On May 19, 1909, an exparte order was made at Special Term requiring the plaintiff to give security for costs, under the provisions of section 3268 of the Code of Civil Procedure, which was subsequently, upon motion, vacated and set aside upon the ground that the determination of whether security for costs should be required was addressed to the discretion of the court under the provisions of section 3271 of the Code of Civil Procedure, and could be considered only upon notice, From the order accordingly entered this appeal is taken. The only question presented by the record requiring our considation is whether the plaintiff’s alleged cause of action arose prior to the adjudication in bankruptcy and the appointment of the trustee. If it did, the defendants were entitled, as matter of right, to the order requiring the security for costs, and the order appealed from must be reversed. The record shows that several judgments were obtained against the bankrupt in May and June, 1908, upon which executions were issued and returned unsatisfied prior to June thirtieth of that year, from which it must follow that more.than six months before the adjudication in bankruptcy a cause of action to set aside and have the alleged fraudulent conveyances declared void existed in favor of such judgment creditors, and the case is brought within the provisions of section 3268 of the Code of Civil Procedure. Í am unable to find any authority conflicting with the rule stated in Joseph v. Raff (75 App. Div. 447). Kronfeld v. Liebman (78 App. [10] Div. 437) is not in point, as in that case there was no proof before the court of the issuance and return of executions unsatisfied prior to the bankruptcy adjudication, until which time a judgment creditor was not in a position to maintain an action to set aside the fraudulent conveyances, and the cause of action alleged by the trustee in bankruptcy had not arisen. (Adsit v. Butler, 87 N. Y. 585 ; Prentiss v. Bowden, 145 id. 342.) It follows that the order must be reversed, with ten dollars costs and disbursements, and the motion to vacate the order for security denied, with costs. Jehks, Burr, Thomas and Miller, JJ., concurred. Order reversed, with ten dollars costs and disbursements, and motion to vacate order for security denied, with costs.