Kiendl v. Cochrane

Miller, J.: The plaintiff is a trustee in bankruptcy of a corporation, which it is alleged was controlled by defendant Seaman, who was its president and treasurer. The adjudication in bankruptcy was made on December 2, 1911. It is alleged that during the ten years prior thereto, when the corporation was insolvent, the defendant Seaman used the corporation funds to pay interest on mortgages which were a lien upon certain premises, and to pay taxes upon said premises, insurance .premiums and other charges and expenses for its benefit; that in November, 1910, a deed, bearing date April 22, 1899, and purporting to be executed by the defendant Seaman and to convey said premises to the appellant, was recorded; that the appellant is the mother of the said defendant Seaman and for a number of years has resided with her in said premises; and that said defendants are in j oint possession thereof. The prayer for relief is that the plaintiff be adjudged to have a lien upon the said premises to the amount of said payments and for the foreclosure thereof. There is no averment that the payments were made at the request, upon the consent or even with the knowledge of the appellant, and the bald question is presented whether a lien can be impressed upon the premises of one person upon the bare fact of the voluntary payment of taxes or other charges thereon by another person with the funds of an insolvent corporation. The rule is well settled that a person who voluntarily discharges another’s debt cannot recover the money paid. (First Nat. Bank of Ballston Spa v. Board of Supervisors,. 106 N. Y. 488; Flynn v. Hurd, 118 id. 19, 26.) A fortiori he cannot have a lien impressed upon real property for money voluntarily paid to discharge liens thereon. Plaintiff relies upon section 66 of the Stock Corporation Law, which prohibits certain transfers to officers, directors or stockholders, or to creditors with the intent of giving a preference, and particularly upon this sentence, viz.: “Every person receiving by means of any such prohibited act or deed any property of the corporation shall be bound to account therefor to its creditors or stockholders or other trustees.” But the complaint does not disclose a case of one of the prohibited [804] transfers to the appellant. She was neither a creditor, a stockholder, a director nor an officer of the corporation and she has received no property of the corporation. The complaint does not disclose to whom the payments' were made. Those who received the money of the corporation are the ones, if any, from whom to recover it under the statute. No fact is stated to impeach the conveyance to the appellant; indeed, it is to be inferred from the averments of the complaint that the conveyance was made in April, 1899, which was before any of the payments complained of were made. The interlocutory judgment should be reversed, with costs, and the demurrer sustained, with costs, with leave to plaintiff to serve an amended complaint upon payment of costs in this court and in the court below. Ingraham, P. J., and McLaughlin, J., concurred; Laughlin and Dowling, JJ., dissented. Judgment reversed, with costs, and demurrer sustained, with costs, with leave to plaintiff to serve amended complaint on payment of said costs.