The opinion of the court was delivered by: MISHLER
Memorandum of Decision and Order
Defendant-third party plaintiff, Franklin National Bank (Franklin), moves for summary judgment on the grounds that the plaintiff's claim is "founded upon a tort" and is therefore barred by the three year statute of limitations contained in 28 U.S.C. § 2415(b).
Prior to June 27, 1966, Technical Capital Corporation (TCC), borrowed the sum of $300,000.00 from the Small Business Administration pursuant to 15 U.S.C. § 661 et seq. and issued a debenture in that amount. The United States then acquired title to the debenture. On June 27, 1966, third-party defendant, Benjamin Abramson (Abramson), borrowed $300,000.00 from Franklin and used the proceeds of the loan to purchase all the outstanding stock of TCC.
On June 28, 1966, the sum of $477,000.00 was deposited to the account of TCC at the Franklin. On the same date, a check in the amount of $300,000.00 was drawn against the funds deposited. The check was signed by Abramson as an officer of TCC and made to the order of Abramson. The endorsement on the back of the check contained the legend, "Re: Purchase of certificate of deposit #7821, $300,000.00 to mature December 7, 1966, CÅ 23-7821."
The complaint alleges that Franklin wrongfully applied TCC funds in issuing a certificate of deposit to Abramson, that Abramson thereafter used the certificate of deposit to pay the personal indebtedness of $300,000.00, and that Franklin wrongfully accepted and applied the certificate of deposit in payment of Abramson's obligation. Franklin admits that the certificate of deposit was used to pay Abramson's personal indebtedness. It denies that TCC funds were wrongfully applied (Answer para. 7). For the purpose of this motion the court assumes the truth of plaintiff's allegations.
Plaintiff obtained judgment in the sum of $307,041.61 against TCC in the United States District Court for the Southern District of New York on July 17, 1967. The plaintiff then commenced this action against Franklin seeking a judgment "requiring defendant to pay to plaintiff the funds wrongfully received from Technical Capital Corporation or so much as is sufficient to satisfy the indebtedness of Technical Capital Corporation to the plaintiff. . . ." (Complaint para. 10).
The complaint in the instant action was filed on June 26, 1972. Both parties agree that, for statute of limitations purposes, the cause of action accrued on July 18, 1966, the effective date of 28 U.S.C. § 2415.
The defendant contends that the action is "founded upon a tort" and hence is barred by the three year limitation period imposed by § 2415(b). In response, the plaintiff urges that the action, if controlled by § 2415 at all, is founded upon an implied contract within the meaning of § 2415(a),
and that the six year limitation period contained therein has not run.
The answer to the question posed by the defendant's motion for summary judgment lies in a determination of the nature of the claim. If the claim is tortious, the claim is barred; if founded upon implied contract, it is not. Plaintiff urges and defendant does not contest the applicability of New York law.
The New York Debtor and Creditor Law, which adopts verbatim the Uniform Fraudulent Conveyance Act, does not confer upon the creditor a right of action in tort against the grantee. Section 278 of Article 10 provides that:
§ 278. Rights of creditors whose claims have matured
1. Where a conveyance or obligation is fraudulent as to a creditor, such creditor, when his claim has matured, may, as against any person except a purchaser for fair consideration without knowledge of the fraud at the time of the purchase, or one who has derived title immediately or mediately from such a purchaser.
a. Have the conveyance set aside or obligation annulled to the extent necessary to ...