Opinion
August 12, 1954.
Creditor's action wherein certain of the defendants moved for multiple relief with respect to the complaint. The Supreme Court, Special Term, Colden, J., held, inter alia, that that count pleading elements of causes of action to set aside alleged fraudulent conveyances, for breach of contract and for conspiracy to breach it was fatally confusing.
Order in accordance with opinion.
Raphael Conlon, New York City, for plaintiff. Sidney O. Raphael, William Levin, New York City, of counsel.
Dreyer Traub, Brooklyn, for defendants Irving Kaskel, Forest Park Cooperative, Inc., Sec. 1, Forest Park Cooperative, Inc., Sec. 2, Forest Park Cooperative, Inc., Sec. 3, and Westbank Construction Corp. Sylvan D. Freeman, Brooklyn, of counsel.
Motion by the defendants other than the defendants Foresthaven Realty Corp., Continental Casualty Company and People of the State of New York for multiple relief with respect to the complaint as hereinafter set forth.
The first cause of action purported to be set forth in the complaint is to impress a trust upon real property which allegedly was fraudulently conveyed away and thereafter leased so as to remove it from the lien of the judgment which plaintiff may recover on the basis of its claim for damages in the sum of $70,000 arising out of the allegedly wilful breach of a written contract made on or about June 9, 1952, under which plaintiff was to supply certain millwork items for the premises.
The second cause of action is to foreclose a mechanic's lien for the sum of $31,024.89 growing out of the contract underlying the first cause of action. Said lien was filed in the office of the Clerk on March 24, 1954, and by order entered on April 6, 1954, cancelled and discharged upon the filing of an undertaking.
The first branch of the defendants' motion challenges the legal sufficiency of the first cause of action. Plaintiff alleges therein that the defendants defeated the rights of the plaintiff under its contract by conveying the various properties therein mentioned without its knowledge or consent; and that at the time of such conveyance it was a creditor of the defendant Foresthaven Realty Corp. "in the liquidated and/or ascertainable amount of approximately $70,000," of which the defendants Kaskel and Foresthaven Realty Corp., its officers, directors, stockholders and employees had full and complete knowledge (complaint, par. 10). Plaintiff also alleges that the defendants requested it to deliver the millwork contracted for, which it did and which the defendants used and installed in the project in question and said defendants further requested the plaintiff to continue to fabricate and prepare other millwork required under said contract and make same ready for continued delivery; that thereafter they conspired, among themselves (a) fraudulently to defeat the rights of the plaintiff under its contract by conveying the various properties without its knowledge or consent and (b) to breach said contract by refusing to accept further deliveries and by notifying the plaintiff that arrangements had been made with other suppliers for the purchase and delivery of the materials called for by the contract (complaint, par. 19).
There are thus pleaded in one cause of action elements of causes of action to set aside allegedly fraudulent conveyances, for breach of contract and for conspiracy to breach it. However, if the plaintiff is entitled to damages for breach of contract, it is not necessary to prove a conspiracy to recover such damages. Proof of conspiracy adds nothing to a cause of action for breach of contract. Labow v. Para-Ti Corp., 272 App.Div. 890, 71 N.Y.S.2d 649. As for a cause of action to set aside conveyances as fraudulent under any of the provisions of Article 10 of the Debtor and Creditor Law, the court is of the opinion that the allegations pleaded in the first cause of action are incomplete for that purpose. While under the statute an action may be maintained to set aside conveyances at the same time that the creditor seeks to recover a judgment at law establishing the debt, American Surety Co. of New York v. Conner, 251 N.Y. 1, 166 N.E. 783, 65 A.L.R. 244, the first cause of action is inadequate to plead either a cause of action to establish a debt or one to set aside conveyances.
Plaintiff urges that the allegations of its first cause of action establish an equitable lien to which it may be entitled if it fails to sustain the mechanic's lien, the subject of the second cause of action. Assuming, without deciding, that a lienor suing to foreclose a mechanic's lien, bonded under subdivision (4) of section 19 of the Lien Law may, by a separate cause of action, seek to establish an equitable lien, cf. General Electric Co. v. Mori, Sup., 201 N.Y.S. 561, such equitable lien is limited to the improvement of the real estate, Gokey v. Massey, 278 App.Div. 630, 102 N.Y.S.2d 581, or the labor and materials furnished in connection therewith. Andrews v. Hancock, 128 Misc. 800, 221 N.Y.S. 80. It may not include, as here, "anticipated profits on the overall contract." (Letter to court of July 24, 1954, supplementing argument in brief.)
In light of the foregoing views, it is evident that plaintiff's first cause of action, intermingling, as it does, elements of several causes and containing unrelated allegations pursuant to which a variety of relief is sought, is in its present form "a confused and confusing pleading which obscures rather than clarifies plaintiff's claims, is impossible of intelligent answer, and to which defendants should not be required to answer." American News Co. Inc. v. Avon Publishing Co., Inc., 283 App.Div. 1041, 131 N.Y.S.2d 566, 567; see also Kalmanash v. Smith, 291 N.Y. 142, 153-154, 51 N.E.2d 681, 686-687. The motion to dismiss said first cause of action is, accordingly, granted, with leave, however, if so advised, to serve an amended complaint separately stating and numbering a cause of action at law establishing a debt for breach of contract, a cause of action to set aside conveyances under one or more sections of Article 10 of the Debtor and Creditor Law, and a cause of action to establish an equitable lien to the extent of labor and materials actually furnished or supplied for the improvement of the real estate in question.
The fifth branch of the motion seeks an order cancelling of record and discharging the lis pendens filed herein in the office of the Clerk on April 22, 1954. The contention is made that upon the filing of the undertaking, pursuant to the order of this court entered on April 6, 1954, the mechanic's lien was cancelled and discharged; that under section 17 of the Lien Law no notice of pendency of action may be filed in connection with the second cause of action — to foreclose the mechanic's lien; and that if the first cause of action be dismissed for legal insufficiency or is found not "brought to recover a judgment affecting the title to, or the possession, use, or enjoyment of real property * * *" it should be cancelled of record in toto.
The lis pendens on file is divided into two parts, the first of which, by express language, is made applicable to the first cause of action, and the second to the second cause of action to foreclose the mechanic's lien filed on March 24, 1954. Upon the filing of the bond discharging said lien, as provided by statute, the cause of action to foreclose said lien became an action to test its validity had it not been discharged, and if found valid to procure a judgment upon the bond rather than a judgment of foreclosure against the real estate. Under such circumstances there is no necessity for a lis pendens in connection with the second cause of action, White Plains Sash Door Co. v. Doyle, 262 N.Y. 16, 19-20, 186 N.E. 33, 34-35, and, accordingly, it is cancelled with respect thereto, Breen v. Lennon, 10 App.Div. 36, 41 N.Y.S. 705. Insofar as this branch of the motion seeks to cancel said lis pendens in connection with the first cause of action, it is denied without prejudice to renewal after the amended complaint has been served. There can be no doubt that a properly stated cause of action to set aside conveyances of real property under the Debtor and Creditor Law will sustain the filing of a lis pendens under Section 120 of the Civil Practice Act. Consequently it is unnecessary at this time to pass upon the question whether a lis pendens may be filed in connection with a separate cause of action to establish an equitable lien on real property when at the same time a statutory lien which has been bonded is sought to be established. Lien Law, §§ 17, 19, subd. (4). It is only if the plaintiff cannot or does not choose to allege a cause of action under the Debtor and Creditor Law in the amended complaint but pleads a cause of action to establish an equitable lien for the amount for which the mechanic's lien was filed that the filing of a lis pendens in connection with such cause of action will become relevant.
The sixth branch of the motion seeks an order requiring the plaintiff to bring in as a party defendant one Morris Kavy. The photostatic copy of the underlying contract, dated June 9, 1952, attached to the moving papers, consists of a letter of the plaintiff addressed to Kavy and by the latter signed following the typewritten word "Accepted." Plaintiff urges, in the concluding paragraph of its opposing affidavit, and in "Point VI" of its brief, that Morris Kavy acted for an undisclosed principal and that, therefore, he is not a proper party to the action. The law is otherwise. An agent who makes a contract in his own name for an undisclosed principal is liable on that contract and should be made a party defendant in an action based thereon. Ell Dee Clothing Co. v. Marsh, 247 N.Y. 392, 160 N.E. 651; Meyer v. Redmond, 205 N.Y. 478, 98 N.E. 906, 41 L.R.A., N.S., 675; Goodman Products Corp. v. A. Lustig Corp., 265 App.Div. 506, 39 N.Y.S.2d 660. This branch of the motion is, accordingly, granted, the order to provide for a definite time within which Morris Kavy shall be joined as a party defendant to this action. Civil Practice Act, § 193, subd. 2.
The remaining three branches of the motion seek corrective relief with respect to the present complaint. Inasmuch as an amended complaint is to be served, the court will pass upon the objections raised, to remove the defects to which they are addressed from the new complaint.
The second branch of the motion seeks to strike out, pursuant to rule 103 of the Rules of Civil Practice seven of the allegations of the complaint as frivolous, irrelevant, unnecessary, etc. The fourth seeks, pursuant to the same rule, to strike ten of the allegations of the complaint as sham, including two embraced by the second branch of the motion. That branch is granted as to paragraphs 20, 21, 23, 24 and so much of 26 as repeats by reference allegations of the first cause of action which are unnecessary to a statement of the second. Cf. Sperling v. McGee, 268 App.Div. 1049, 52 N.Y.S.2d 229.
The fourth branch of the motion is based upon the contention, in substance, that the only person with whom plaintiff contracted was Morris Kavy. The merits of that contention cannot now be determined, for if it be the fact that Morris Kavy was, within his authority, acting as agent for one or more undisclosed principals, the liability on the contract may not only be his but theirs as well. Langstroth v. J.C. Turner Cypress Lumber Co., 162 App.Div. 818, 825-826, 148 N.Y.S. 224, 228-229, affirmed 220 N.Y. 706, 116 N.E. 1057; see Lerand Corporation v. Meltzer, 267 N.Y. 343, 346, 196 N.E. 283, 284; Civil Practice Act, § 112-b. This branch of the motion is, therefore, denied.
The third branch of the motion, pursuant to subdivision 1 of Rule 102 of the Rules of Civil Practice, to make the complaint more definite and certain with respect to the identity of the person or persons with whom the underlying contract was made is granted.
Settle order on notice.