Banigan v. Village of Nyack — 25 A.D. 150

Majority

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William P. Banigan, as Receiver of the Property of Timothy D. Lynch, in Proceedings Supplementary to Execution, Appellant, v. The Village of Nyack, a Municipal Corporation, Timothy D. Lynch and Benjamin W. Demarest, Respondents.

Headnote

Action, by one as receiver of a judgment debtor, under a void appointment—a supplemental complaint setting up a valid appointment as receiver after the action was commenced is ineffective —effect of an acceptance of the terms under which the supplemental complaint was allowed — dismissal on the merits improper — nonsuit.

A party assuming to have been appointed receiver in proceedings supplementary > to execution before the issue of an execution against the property of the judgment debtor, whose appointment is, therefore, invalid, should not be. permitted, in an action brought by him to set aside as void, under section 473 of the Penal Code, an assignment made by the judgment debtor of his claim, against a village, to a trustee of the village; to- set up, by an amended, or supplemental complaint, the recovery, after the action was begun, of a second judgment against the debtor, the issue of an execution and bis appointment as receiver in supple- - mentaiy proceedings instituted1 thereon.

The cause of action thus alleged is a new one which did not accrue before the commencement of the action, and is not available to-the plaintiff therein; and the fact- that no appeal was taken from the' order which allowed the amended or supplemental complaint to be served on terms, and that such terms were accepted, does .not prevent the application, of the rule..

It is, however, erroneous-for 'the court, in such a case, to dismiss the complaint ’ upon the merits. -

The dismissal of the complaint in such an action by the court, without having made any. decision or findings, is equivalent to the granting of a. nonsuit.

Appeal by tlie plaintiff, William P. Banigan, as receiver of the ,- property of Timothy D. Lynch, in protiee'diiigs supplementary to execution, from a judgment of the Supreme Court in favor of the defendants,, .entered in the office of the clerk of the county of' Rockland on the 12tli day of March, 1897, upo'n the dismissal of the complaint upon the merits by direction of -the court after a trial at the Rockland Trial Term.

■ .Richard S. Harvey, for the appellant....

George A,Wyre, for the respondent. "

This action was instituted on'December 31,1895.' It was "brought by the plaintiff, as. receiver of .the' defendant Lynch, appointed in

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supplementary proceedings taken against that defendant to collect the amount due to Lynch from the village of Hyaek on a contract for the performance of certain work. The defendant Demarest was one of the trustees of the village,' and had advanced money to Lynch to enable him to carry out Iris contract. When the contract was performed, Lynch assigned his claim against the village to Demarest. The assignment was made to Demarest before. the commencement of this action, but the claim had not at that time been paid by the village. The plaintiff claimed that the assignment to Demarest was void as being in contravention of section 473 of the Penal Code, which provides that any public officer who, being authorized to make any contract, voluntarily becomes interested therein, shall be guilty of a misdemeanor. The original complaint in the action did not allege the issue of any execution on the judgment under which the. supplementary proceedings were taken and the plaintiff was appointed receiver, and as matter of fact none had then been issued. Subsequently other judgment creditors of Lynch issued an execution on their judgment, initiated supplementary proceedings thereon, and on October 5, 1896, the plaintiff was appointed receiver in those proceedings. He thereupon applied to the court for leave to serve an amended complaint, setting forth the second judgment and the -execution and supplementary proceedings thereon. This leave was 'granted. On the trial the defendant moved to dismiss the complaint on the ground that the plaintiff’s cause- of action accrued subsequent to the commencement of the action. This motion the court denied, and the evidence of the parties was taken. Subsequently the trial court made an order dismissing the complaint on the merits, and on this order judgment, was entered. Ho decision of the court other than the order recited appears iii the record.

The court having made neither a decision nor findings, as required by the Code, we should be constrained to reverse this judment and remit the cause to the Special Term as undecided, except for the order made by the trial justice directing that the complaint should be dismissed. This can be treated as the equivalent of a nonsuit in an action at law, and it becomes necessary for us to determine whether the plaintiff made out aprima facie case. The rule is that the plaintiff, to-succeed in an action, must establish that he had a

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cause of action at the time of the commencement of the suit. lie cannot supply the want of a valid claim at the commencement of the action by the acquisition of one during the pendency of the action, On account of the failure to issue execution on the first judgment, not only was the appointment of the plaintiff as receiver invalid, but no cause of action existed; for, had the judgment creditor instead of his receiver brought the suit, the want of the execution would' have been equally fatal to' his recovery. The appellant does not deny this proposition, but contends that the amendment having been made in pursuance to an order of the court which imposed terms, and the respondent having accepted those terms, the objection cannot be now taken.

. Properly the plaintiff’s new pleading should be considered a supplemental complaint instead of an amended, complaint. The rule governing the granting of leave to serve such pleadings is settled by a long line of authorities. Leave should not be granted where its object is to set out a new cause of action when none existed at the time of the commencement of the suit. .(Farmers’ Loan & Trust Co. v. U. L. Tel. Co., 41 Hun, 315 ; Continental C. & I. Co. v. Vinal, 1 N. Y. Supp. 200 ; Bostwick v. Menck, 4 Daly, 68 ; Bull v. Rothschild, 4 N. Y. Supp. 826 .) “To entitle the plaintiff to file a supplemental bill and thereby obtain the benefit of the former proceedings, it must be in respect to the same title in the same person as stated in the original bill. "x" * "-t 'Where the plaintiff had no title when the bill was filed, he could not set up by way of supplement a title subsequently acquired by purchase from another.” (Haddow v. Lundy, 59 N. Y. 320 .) It is, therefore, clear that, had the defendants appealed from, the order granting leave to serve the so-called amended complaint, the order could not 'have been upheld; but the question now presented is, the complaint having been amended by authority of the court, .is it sufficient to maintain the plaintiff’s action.

I think not.. So far as it brought into the 1'itigation anew and different cause of action the order, whether proper or not, is undoubtedly effective. But when that cause of action is presented on the trial for determination as to its sufficiency it seems to me to be subject to any objection that could have been taken had it been declared upon originally. Had the time of the plaintiff to serve the complaint been

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extended to the date at which he sewed this amended complaint the action could not have been maintained. The same would have been the case had the defendants voluntarily given the 'plaintiff permission to serve an amended complaint. I cannot see'that the order of the court can have any greater effect on the pleading than the consent of the defendants would have had. The plaintiff having failed to establish a cause of action existing at the time he commenced the suit his complaint was properly dismissed, but the direction that the dismissal should be on the merits was erroneous.

The judgment should be modified by striking out the direction as to the merits, and as modified affirmed, without costs.

All concurred, except Goodrich, P. J., not sitting.

Judgment modified by striking therefrom the direction that the complaint is dismissed on the merits, and as modified affirmed, without costs.

Cases cited

Haddow v. Lundy 59 N. Y. 320 N.Y. 1874-12-22 p. 152