Trowbridge v. Troy & New England Railway Co.

Majority

p. 325

Lawrence W. Trowbridge, Appellant, v. The Troy and New England Railway Company, Defendant. Della Galusha, Respondent.

Third Department,

May 18, 1906.

Headnote

Debtor and creditor-—action to sequester debtor’s property under section 1784 of the Code of Civil Procedure — when creditor of defendant should not be let in to defend after judgment for plaintiff.

When in a judgment creditor’s action under section 1784 pf the Code of Civil Procedure, brought to sequester the property of the defendant, judgment for the plaintiff has been entered, another creditor of the defendant should not be allowed to open the judgment and defend when it is not shown that she has apy defense on the merits.

The validity of such claim should be determined under the judgment, which, pursuant to section 1793 of the Code of Civil Procedure, provided for the exhibit and proof of all claims against the defendant. ...

Appeal by the plaintiff, Lawrence W. Trowbridge, from an order of the Supreme Court, made at the Ulster Special Term and entered in. the office, of the clerk of the county of Rensselaer on the 30th day of March, 1906, bringing in the respondent, Della Galusha, as a party defendant, and giving her leave to answer.

The action is a judgment creditor’s action brought under section 1784 of the Code of Civil Procedure for the sequestration and distribution of the property of the defendant among its creditors. The appellant is a judgment creditor of the defendant, and after the return unsatisfied of the execution which, he issued upon his judgment this action was begun, by him against: the defendant and a temporary receiver of the defendant was appointed* On the defendant’s default in answering final judgment was entered providing for the sequestration of the defendant’s property .and for the appointment of the temporary receiver as permanent receiver. The order appealed from granted the motion of Della Galusha after judgment to be made a party defendant in the action under section 452 of tli.e Code of Civil Procedure with leave to answer on her allegation that she was interested in the subject of the action because she was the owner of a note made by the defendant and other claims.

p. 326

Horace F. Deming and William Underhill Moore, for the appellant.

Michael F. O'Connor, for the respondents.

The order appealed from should not have been granted. It was made after judgment was entered. No provision is made for opening the judgment. The respondent does not allege that she has any defense to the action and does not submit any proposed answer, Nor was any affidavit of merits presented. Outside of the allegation that she is a creditor of the defendant and owns a note made by it on which there is owing $150 and interest from June 5,. 1905, and also other claims, she furnishes no competent evidence that she is interested in the subject of the action.

The subject of the action was the sequestrating of the property of the defendant and the distribution thereof :among those lawfully entitled thereto. Under the judgment the receiver was directed “ to procure and publish an order requiring all the creditors of the . said defendant to exhibit and prov,e their claims to said receiver * * * and become parties to the above-entitled suit.” The judgment further directs, in harmony with section 1793 of the Code of Civil Procedure, “ that the said receiver make á fair and just distribution of the said property of the said defendant and of the proceeds thereof among its fair and honest creditors who have exhibited and proved their claims in the order and in the proportion prescribed by law as in the case of a voluntary dissolution of a corporation.”

The judgment, therefore, provides a way for the respondent to become a party to the action, namely, upon proving her claims to the receiver and makes provision to protect her if she was a fair and honest creditor of. the. defendant. Until she shows some reason for opening the judgment and that she has some defense to the action on the merits she should be required, if she desires to make herself a party, to do so in the way provided for 'in the judgment and not be permitted to come in as a party without proving her claim, nor to answer when she has. not shown that she has any answer to inake and when she has not even asked ‘ for the opening of the judgment for that purpose.

p. 327

The order should, therefore, be reversed, with ten dollars costs and printing disbursements, and the motion denied, without costs.

All concurred.

Order reversed, with ten dollars costs and disbursements, and motion denied, without costs.