263 West 38th Street Corp. v. Kobrinetz

Per Curiam. The third party was found to have funds of the judgment debtor amounting to $7,258.85 in his possession which [414] he acquired through fraud of two judgment creditors, one with a judgment of $2,283.36 and the other with which we are concerned upon this appeal where judgment amounted to $1,859.43. The receiver appointed in supplementary proceedings had this fraudulent transaction "avoided by a judgment in an appropriate action in the Supreme Court. The judgment required the third party to pay the amount of same “ and such further sum as shall be fixed by the Court where such receivership is pending to pay the costs, disbursements, commissions and counsel fees of said receivership.” This provision was stricken out on appeal to the Court of Appeals which held that “ Whether such payment shall be made to the plaintiff receiver must be determined by the court which appointed him.” (Dailey v. Gidinsky, 293 N. Y. 889.) The third party paid $1,859.43, the amount of the judgment, to the receiver and, after paying the other judgment, still holds $2,158.15 of the fraudulently transferred funds. The City Court on motion directed same to be paid to the receiver, that he account and that in the accounting his fees and expenses would be fixed. We think the City Court was empowered to do this under the judgment and pursuant to sections 804-a and 1547 of the Civil Practice Act. The requirement that the judgment debtor and the fraudulently transferred funds still in the hands of the third party pay the expenses of the receivership necessarily rendered to set aside such transfer seems legal and proper. The third party proceeding and the receivership in supplementary proceedings survived the action for the purpose of effectuating the directions and provisions of the judgment. The payment of the amounts found by the judgment to be due and payable to the judgment creditors in satisfaction of their direct claims, the collection of which was impaired, impeded and delayed by the transfer, did not cut off the right of the receiver as plaintiff to relief for compensation and' expenses as directed by the judgment and the modification thereof by the Court of Appeals. The judgment declared liens and imposed a trust upon the entire funds for the payment of plaintiffs’ claims, including, we think, the compensation and expenses of the receivership, as well as the actual amounts directed to be paid the judgment creditors, and provided that plaintiffs could apply at the foot thereof for further relief, including provision for collection. We feel the trust funds so impressed with liens are still rendered available for such payment, and it is unnecessary to decide as between the third party and the judgment debtor which of them is entitled to the balance. The order should be affirmed, with $10 costs and disbursements.