
    City Equity Company, Respondent, v. Elm Park Realty Company and Jacob I. Housman, Appellants, Impleaded with Mary Elizabeth Housman, Defendant.
    Second Department,
    December 30, 1909.
    Party — effect of failure to object to defect of parties — necessary parties tó suit in equity — power of appellate court to bring in parties — debtor and creditor —fraudulent conveyance to corporation — stockholder procuring conveyance not necessary party.
    Where objection to a defect of parties -is not raised by answer or demurrer, or taken at the trial, the strict legal right to have the parties brought in is lost. But, it seems, where the suit is'in equity and a complete determination of the controversy- cannot be had without the presence of other parties, the court -of its-own motion may direct them to be brought in, and a party may urge that the presence of other parties is necessary for the first time on appeal, for tlie court will not render a fruitless judgment.
    A stockholder through whom an alleged fraudulent conveyance was made to liis corporation, while a proper, is not a necessary party tó a suit in equity to set aside the conveyance as in fraud of creditors, even though the original contract to convey was made with, him and the final conveyance was made to the corporation as bis appointee.
    This is true although the. conveyance is set aside upon a finding that an indebtedness owed by the grantor to the stockholder was fictitious, for if the indebted ness was not fictitious the stockholder, not being a party, is not bound by the decree; and although he furnished the only alleged consideration, by virtue of the statute there was no title or resulting use or trust in his favor or in the favor of any person except his creditors to the extent necessary to satisfy their just demands.
    Where lands are conveyed to a corporation in fraud of creditors, a stockholder has no equitable interest in the property which makes him either a necessary or a proper party to a suit to set aside the deed.
    Appeal by the defendants, the Elm Park Realty Company and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Richmond on the 19th day of January, 1909, upon the decision of the court rendered after a trial at the Richmond Special Term.
    
      Henry J. McCormick, for the appellants.
    
      Benjamin N. Cardoso [Harold Swain and Alfred G. Reeves with him on the brief], for the respondent.
   Burr, J.:

The findings of the court at Special Term to the effect that the conveyances made by the defendant Jacob I. Housman and.his wife to the defendant Elm Park Realty Company were made without consideration and with intent to hinder, delay and defraud the creditors of the said Jacob I. Housman and particularly one Joseph T. Williamson, a judgment creditor of the said Housman and the assignor of the plaintiff, are so abundantly sustained by the evidence and the grounds of such conclusions are so clearly, accurately and concisely stated by the. learned trial justice in his opinion, that furthér discussion of - the evidence is unnecessary. The only question which we deem worthy of consideration is whether there is a-defect of parties because Midiólas P. Housman was not made a party defendant to this action. The objection of a defect of parties, if it existed, was not raised by answer or demurrer, nor was such objection taken during the trial of the action. Therefore, any strict legal right on the part of the appellants Jacob I. Housman, the grantor, and Elm Park Realty Company, the grantee named in the said fraudulent conveyance, to insist upon the bringing in of Midiólas P. Housman as an additional party defendant is 'gone. (Code Civ. Proc. §§ 488, 498, 499; Cook v. Lake, 50 App. Div. 92.) Nicholas P. Housnian has never made' application to the court to bé made a party defendant, nor has he any standing upon this appeal. Notwithstanding this, in an action in equity “ where a complete determination of the controversy cannot be had without the presence of other parties, the court'must direct them to be brought in ” (Code Civ. Proc. § 452), and it would seem that this objection may be raised even on appeal, and in a proper case the court may proceed on its'own motion to suspend the trial until additional parties are brought in. “It will not render a fruitless judgment, nor will it undertake to decide a single right in the absence of persons who are entitled to be heard in respect to it, and who may be prejudiced by the decisión.” (Osterhoudt v. Board of Supervisors, 98 N. Y. 239.) It seems to us clear that a complete determination of this controversy can be had without' prejudice to the rights of Nicholas P. Housmari and without his presence. It is true that the judgment in this action has for its foundation a finding that a pretended indebtedness from Jacob I. Ilousman to' Nicholas P. Housman did not in fact exist, but is fictitious and fraudulent. If such is not the case, as Nicholas P. Ilousman is not bound by this judgment as a party defendant, his right to enforce his claim is neither affected nor prejudiced thereby. The object of this action is not to liave a receiver appointed of all of Jacob I. Housman’s property, but to remove a fraudulent obstruction.to the lien of a judgment held by the • plaintiff upon property owned by the defendant Elm Park Realty Company, so that such lien may be enforced by sale under an execution. Even though the deed be set aside, so far a that lien is concerned, it still remains valid between the grantor and the grantee named therein. Nicholas Pi Housman has no legal estate in this land. . Even if it be claimed that lie- furnished the only alleged consideration for the conveyance, to wit, a release pro tanto of his pretended indebtedness, no title vests in him, nor would any use or trust result in his favor or in favor of any person except his creditors to an extent necessary to satisfy their just demands. (Real Prop. Law [Gen. Laws. chap. 46; Laws of 1896, chap. 547], § 74.) He has no equitable interest in the property affected by this judgment except as a stockholder in the defendant company, but this would make'it neither necessary nor proper to join him as a party defendant to this action any more than any other stockholder. (Gardner v. C. B. Keogh Mfg. Co., 63 Hun, 519.) If it should- be claimed that the said Nicholas P. Housman was in effect an intermediate grantor because the contract for the transfer of this property was originally made .between him and Jacob I. Housman, although the conveyance was made directly to the defendant Elm Park Realty Company as his appointee, this would not make him a necessary, though he-might be a proper, party to the action. (Cook v. Lake, supra.) If it should be claimed that an equitable owner of property who had an interest therein by reason of an agreement on the part of the record owner to hold the property for him and to reconvey it to him whenever requested so to do, made it necessary that such equitable owner should be made a party defendant to such an action, it is sufficient to say that in this case there is no evidence of any such agreement.

The judgment appealed from should be affirmed, with costs.

Woodward, Jerks, Thomas and Rich, JJ., concurred.

Judgment affirmed, with costs.  