This is the construction given in New York to comparable statutory provisions. Bernheim v. Burden, 253 App. Div. 232, 1 N.Y.S.2d 689; see, also, quotation given in preceding note. The grantor-debtor, in a case of this kind, is in no moral or equitable position to resist the action by contending that the plaintiff should first have exhausted other remedies against him.
Pittsburgh Carbon Co. v. McMillin, 119 N.Y. 46, 23 N.E. 530, 531 (1890); see also Attorney Gen. v. Guardian Mut. Life Ins. Co., 77 N.Y. 272, 275 (1879) (stating that the receiver of an insolvent corporation โmay disaffirm and maintain an action as receiver to set aside illegal or fraudulent transfers of the property of the corporation, made by its agents or officers, or to recover its funds or securities invested or misappliedโ). Although these statements were made before New York's Debtor and Creditor Law was enacted in 1925, see Eberhard, 530 F.3d at 130, the Second Circuit has explained that the Debtor and Creditor Law's statutory predecessors, like the modern statute, provided that only creditors had standing to void a fraudulent conveyance, id.; see also Bernheim v. Burden, 253 A.D. 232, 1 N.Y.S.2d 689, 689โ90 (1938) (โ[A]n action is ... maintainable by a receiver to set aside a fraudulent conveyance under the Debtor and Creditor Law.โ); 91 N.Y. Jur.2d Receivers ยง 87 (โThe permanent receiver of a corporation may ... bring an action or institute a proceeding to set aside fraudulent transfers.โ (citing Guardian Mut. Life Ins., 77 N.Y. 272)).
In the present action an accounting is alleged to be necessary and is necessary. Upon the issues raised upon these motions, it is no concern of the defendants whether the corporation had creditors other than Anness. There is nothing in the record to indicate that there are other creditors of the corporation and it must be assumed that there are none except Anness and the fact that the suit is brought by the receiver in the sequestration proceeding rather than by the creditor individually is of no materiality ( Whalen v. Strong, 230 App. Div. 617; Hitz v. Garfinkel, 246 App. Div. 728; Bernheim v. Burden, 253 App. Div. 232; Buckley v. Stansfield, 155 App. App. Div. 735; affd., 214 N.Y. 679; Feigenbaum v. Narragansett Stables Co., 127 Misc. Rep. 114; affd., 245 N.Y. 628). At the moment we are not concerned with the question as to whether recovery may be had over and above the amount of the creditor's claim or what would become of any surplus recovery, if permissible. Since the moneys of the corporation are alleged to have come fraudulently into the hands of the defendants, the action is an action for an accounting in equity and for a return of the funds.
Order affirmed insofar as appealed from, with $50 costs and disbursements. The sole issues before this court are those which were raised at Special Term. Defendants' reliance upon issues not raised at Special Term is improper (see American Ind. Contr. Co. v. Travelers Ind. Co., 54 A.D.2d 679, affd 42 N.Y.2d 1041; Matter of Poulos v. D'Elia, 66 A.D.2d 820). Although plaintiff is a judgment creditor of defendant Clara Kimmel, he is not required to pursue his enforcement remedies at law (see CPLR 5201 et seq.) prior to bringing this action under sections 276 Debt. Cred. and 278 Debt. Cred. of the Debtor and Creditor Law (see American Sur. Co. v. Conner, 251 N.Y. 1, 5-8; Bernheim v Burden, 253 App. Div. 232). Moreover, these provisions permit a money judgment to be taken against the alleged fraudulent transferees in the amount of plaintiff's claim, limited only by the value of the transferred property (see Gruenebaum v Lissauer, 185 Misc. 718, 730, affd 270 App. Div. 836). Accordingly, the allegations of the complaint are legally sufficient. Titone, J.P., O'Connor, Margett and Martuscello, JJ., concur.
The sixth and ninth causes of action are, respectively, against Christine as executor and Christine individually and seek an award of attorneys' fees pursuant to Debtor and Creditor Law ยง 276-a. As a threshold matter, "[a] creditor does not have to reduce a claim to a judgment to avail himself or herself of the right to set aside a fraudulent conveyance" (Finkelman v Greenbaum, 14 Misc 3d 1217[A], 2007 NY Slip Op 50063[U], *6 [Sup Ct, Nassau County 2007], citing Bernheim v Burden, 253 App Div 232 [2d Dept 1938]).
Adoption of the UFCA in New York also changed earlier law by eliminating the requirement that a creditor reduce a claim to judgment in order to ask that a conveyance [660 N.Y.S.2d 943] be set aside as fraudulent. American Surety Co. of New York v. Conner, 251 N.Y. 1, 166 N.E. 783 (1929) ; Bernheim v. Burden, 253 A.D. 232, 1 N.Y.S.2d 689 (1 Dept.1938). Indeed, it has long been held in New York that a creditor has standing to maintain an action to set aside a fraudulent transfer (bringing a separate action is no longer a procedural requirement), even though his debt may not have been in existence at the time of the transfer.
Adoption of the UFCA in New York also changed earlier law by eliminating the requirement that a creditor reduce a claim to judgment in order to ask that a conveyance be set aside as fraudulent. ( American Sur. Co. v. Conner, 251 N.Y. 1;Bernheim v. Burden, 253 App. Div. 232 [1st Dept 1938].) Indeed, it has long been held in New York that a creditor has standing to maintain an action to set aside a fraudulent transfer (bringing a separate action is no longer a procedural requirement), even though his debt may not have been in existence at the time of the transfer.
He may seek the aid of equity, and without attachment or execution, may establish his debt, whether matured or unmatured, and challenge the conveyance in the compass of a single suit." (See, also, Bernheim v. Burden, 253 A.D. 232; Meyer Connor Co. v. United Founders Corp., 238 id. 642, 646.) Furthermore, it would seem equitable to all the depositors that equity take jurisdiction under the facts and circumstances alleged in the complaint.