Clarkson v. Dunning — 22 Abb. N. Cas. 439

Majority

p. 439

CLARKSON v. DUNNING.

N. Y. Supreme Court, Second Department, General Term ;

February, 1889

Headnote

Stipulation; deposit of money until determination of appeal.] The attorneys for the respective parties entered into a stipulation to deposit moneys in a trust company subject to order of the court after final judgment, and the determination of the final appeal, the stipulation also providing that it was not to affect the rights of either party to require security on appeal. The plaintiff having recovered in the action, his attorney withdrew the moneys deposited, after which the defendant’s attorneys served a notice upon the plaintiff’s attorney, staying all proceedings on the judgment.

Held, 1. That it was proper to direct the plaintiff’s attorney to re-deposit the money in the trust company until the expiration of the stay of proceedings, after which the plaintiff could properly withdraw it, providing the defendants failed to give security, pending appeal.

2. That if such security were furnished the fund should be held by the trust company to await the result of the appeal.^[1]

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Appeal from an order of the special term requiring a re-deposit of moneys in a trust company.

This was a judgment creditor’s action brought by Theodore Clarkson against Frances G. Dunning and William Bailey Lang, to set aside a conveyance of real estate made by Lang to Dunning as fraudulent and void as against creditors. Prior to the commencement of this action the defendant, Dunning, entered into a contract for the sale of the property, whereupon and after the commencement of this action the plaintiff’s and defendants’ attorneys made and signed a stipulation as follows:

“ The plaintiff having commenced this action to have a conveyance made by the said Lang to the said Dnnning declared void, and for the appointment of a receiver and the sale of the premises so conveyed, which premises are situated in the town of Scarsdale, in said county, and particularly described in the complaint. And a notice of the pendency of the action having been filed in the office of the clerk of said county, on July 5, 1887, and the said premises, on July 7, 1887, having been sold by the defendant^ Dunning, at public auction for the sum of §15,000, and there remaining after payment of certain incumbrances on said property, the sum of twelve thousand dollars, and the plaintifE and the said Dunning being desirous of having the said sale completed and the notice of pendency of the action can-celled.

“Xow, it is stipulated and agreed, that the said notice of pendency of action may be cancelled upon condition that the said sum of twelve thousand dollars shall be deposited in the United States Trust Company of the city of Xew York, subject to an order of the court in this action, after final judgment and the determination of the final appeal herein. It being understood that the said sum of twelve thousand dollars is to stand in the place of and to represent the premises described in the complaint.

“ This stipulation is not to affect the fights of either party

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herein as to the taking of any appeal in this action, nor the right of either party to this action to require security on any appeal. And any appeal herein is to be taken, and security to stay proceedings thereon to be given in like manner, as if this stipulation had not been made, and as if said land still remained the subject of litigation in this action, the only effect of this stipulation being to substitute the proceeds of said sale in the place of the land as the subject of this action.”

In accordance with this stipulation the sum of $12,000 was deposited with the United States Trust Company of the city of New York.

The action then coming on for trial, the plaintiff recovered, and judgment in his favor was then entered.

Before service on defendants’ attorneys of notice of entry of judgment and before service on plaintiff’s attorney of a stay of proceedings granted by the justice who tried the cause, the plaintiff’s attorney, in accordance with the judgment entered by him, notice of settlement of which, it was alleged by defendants’ attorneys, was not given, withdrew the deposit.

The defendant, Dunning, then moved for an order requiring the plaintiff’s attorney to restore the $12,000, and re-deposit the same with the United States Trust Company, there to remain in compliance with the terms of the stipulation until the determination of the final appeal in the action.

The motion coming on to be heard before Hon. Edgar M. Cullen, the following decision was rendered:

I think the plain meaning of the stipulation is that the fund deposited should remain subject to the final appeal, provided the defeated party should give such security on the appeal as might be required. Before the money had been withdrawn Justice Dykman granted a stay of proceedings on the judgment, although notice of that order was not given the plaintiff’s attorney. The attorney was not culpable therefore in drawing the fund. But after notice of the

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order the fund should have been returned. This course will protect the rights of both parties. If at the expiration of the stay, granted by Justice Dykman the defendant fails to obtain a stay pending appeal, the plaintiff will be entitled to withdraw the fund. If such stay should be granted the fund will be held to await the result of the appeal, and the evident intent of the stipulation carried out.

Motion granted without costs.

From the order entered upon* this decision the plaintiff appealed to the general term.

Thomas H. Wheeler, for the appellant, contended:

There are two conflicting conditions under which the money was deposited in the Trust Company.

The first condition is that it is “ subject to an order of the court in this action after final judgment and the determination of the -final appeal herein.”

The last condition is that “ the only effect of this stipulation being to substitute the proceeds of said sale in the place of the land as the subject of this action.”

Where in an agreement there are conflicting conditions, the lasl one should stand, because that is the last expression of the intention of the parties.

Judge Cullen places his decision upon the ground that Mr. Justice Dykman granted a stay of proceeding, although that stay had not been served on the plaintiff’s attorneys before he drew the money.

The defendant was guilty of laches in not obtaining a stay sooner. She had plenty of time to have obtained a stay preventing the withdrawal of the money. She neglected to do it.

The order which required the re-deposit of the money, was in effect an order of restitution, which the court at special term had no power to make.

John II. Corwin (Harris & Conoin, attorneys), for the respondent.

I. The court exercises jurisdiction over the

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acts and conduct of its officers summarily, compelling them by order to proper practice, and restraining them in like manner from improprieties, oppression or dishonesty in their dealings with the court, the parties or the subject matter of the litigation (Wilmerdings v. Fowler, 14 Abb. Pr. N. S. 249; modified, 15 Id. 86; see also s. c., 55 N. Y. 641 ).

II. Stipulations made in the action are as binding as orders of the court, and will be enforced in like manner.

III. A stipulation which contemplates a subsequent judgment, and provides that in case of its rendition the property, which is the subject of the action, shall remain in court, to await the result of an appeal is of superior force and obligation to the judgment, and operates as a stay of proceedings. The order was not at variance with, nor an attempt to reverse the judgment, but was in accordance with the order staying proceedings made by the judge who tried the cause.

IY. There can be no doubt that the money when in the Trust Company was in the custody of the court. This appears from the following considerations. 1. It was paid into the Trust Company, under a stipulation made and entitled in the action. 2. The Trust Company is one of the depositaries designated by the rules of court, for money paid into court. 3. The receipt of the Trust Company is entitled in the action. 4. The fund was by the stipulation to be paid out by the Trust Company, only on an order of the court, after final judgment and the final appeal herein. 5. The Trust Company, not being a party to the action, the judgment entered by plaintiff, nevertheless, directs the Trust Company to pay over the money, wdiicli it could not do, except upon the theory that the Trust Company were acting in the premises as the court’s custodian of moneys paid into court. The money is therefore under the control of the court.

V. Langley v. Warner, 3 N. Y. 327 , is not an authority adverse to the defendant. No. stipulation existing in that case, and the money collected not being in the custody of

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the court’ it merely held that money collected by the attorney upon an execution, could not be recovered, after reversal'of the judgment. Nor is it believed that there can be found any authority which will forbid the granting of the motion.

VI. The question as to security upon the stay on appeal was not involved. The defendant obtained a stay on giving security, which stay is now in operation. The order of Mr. Justice Cullen was quite as favorable as plaintiff could have asked, and his interpretation of the stipulation all that plaintiff could claim.

The plaintiff brought an action to set aside a conveyance to land upon the ground that the same was a fraud .upon creditors. A notice of lis pendens was duly filed, and subsequently thereto an agreement was made between the parties,-designed to permit the defendent to sell the land and to deposit the proceeds to take the place of the land. Both parties were anxious to sell the property. The agreement provided that the said notice of pendency of action may be cancelled upon the condition that the said sum of twelve thousand dollars shall be deposited in the United States Trust Company of the city of New York, subject to an order of this court in this action after final judgment and the determination of the final appeal herein. It being understood that the said sum of twelve thousand dollars is to stand in the place of and to represent the premises described in the complaint. This stipulation is not to affect the rights of either party herein, or to the taking of any appeal in this action, nor the rights of either party to this action to require security on any appeal, and any appeal herein is to be taken and security to stay proceedings’therein to be given in like manner as if this stipulation had not been made and as if said land should remain the subject of litigation in this action, the only effect of this stipulation being to substitute the proceeds of said sale in the place of the land. The case was decided in favor of the plaintiff, July 28, 1888, and the defendant obtained a stay on August 1,

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1888, with a view to appeal, and before an order was served the plaintiff had drawn out the twelve thousand dollars. This was an act entirely unsustained by the stipulation and directly in opposition to its true intent and meaning. The money was to remain in until “ after a determination of the final appeal herein.”

The deposit was, it is true, in the place of the land, but the plaintiff had no right to the land so long as- an appeal could be taken from the judgment at special term.' If after appeal, no security upon appeal to stay proceedings hereby appealed was given, a new question will be presented, whether or no the fund can then be withdrawn before the final appeal is decided.

The present order is right and should be affirmed with costs and disbursements.

Pratt and Dykhah, JJ., concurred.

Cases cited

Wilmerdings & Mount v. Fowler 55 N. Y. 641 N.Y. 1873-11-18 p. 443
Langley v. Warner 3 N. Y. 327 N.Y. p. 443