Cutter v. Reilly — 31 How. Pr. 472

Majority

p. 472

NEW YORK SUPERIOR COURT.

Joseph A. Cutter, Receiver of the property of Peter Reilly agt. Peter Reilly, Miles O’Reilly, and-O’Reilly, wife of said Miles O’Reilly, and Ann Reilly, wife of Peter Reilly.

Headnote

In an action brought by a receiver, in supplementary proceedings, and in pursuance o£ the order appointing him, to set aside a conveyance of real estate made by the judgment debtor, to a third person, and the defendant succeeds on the trial, the judgment creditors of the debtor, who are not parties to the action, and took no part in its prosecution, are not liable for the costs of the action (Following the decision in the case of Wheeler agt. Wright, 28 Sow. Pr. j$. 228),

The law making parties in interest Hable for costs, was not intended to apply to actions brought in the name of sheriffs, receivers, clerks or other officers of the court, although third parties might be interested in the recovery, unless the action was brought at the sole suggestion and urgency of such parties, and virtuaUy conducted by them, and especiaUy so, to a case where the action was brought by direction of the court.

Special Term August, 1866.

An action was commenced on or about the month of January, 1863, by the above named plaintiff, as receiver of all the property of Peter Reilly, one of the above named defendants. The plaintiff, Joseph A. Cutter, was appointed as such receiver in proceedings supplementary to execution had in a certain action, wherein Peter Woods and John Woods were plaintiffs and Peter Reilly was defendant, and wherein a judgment in favor of said Peter Woods and John Woods, and against the said Peter Reilly, had been entered for $91.09. The above entitled action was brought to set aside certain conveyances of real estate made by the said Peter Reilly, as fraudulent and void as against creditors. At the time of bringing the action, said Peter Woods and John Woods were judgment creditors of said Peter Reilly, and it was alleged that they were beneficially interested in any recovery which might be had in said action. The action was tried before Mr. Justice McCunn in January, 1864, who found for the defendants herein, dismissing the complaint with costs against the plaintiff, and deciding that said con

p. 473

veyances were not fraudulent and void as against creditors. The defendants’ attorney caused, upon notice to the plaintiff, the costs of the defendants herein to be taxed at $50.65, and a judgment therefor to be duly entered with the clerk of this court, and a transcript to be filed and docketed with the clerk of the city and county, of New York. On or about the 7th of August, 1866, an execution was issued upon said judgment to the sheriff of the city and county of New York, for the collection thereof, which execution was subsequently returned by said sheriff, unsatisfied, for want of property of the defendants to satisfy the same.

Upon a statement of such facts, an order of Hon. John M. Barbour, a justice of this court, was made on the 27th August, 1866, requiring said Peter Woods and John Woods, creditors aforesaid, to show cause at a special term of this court, on the 30th day of August, 1866, why they and each of them, should not be made liable for the costs recovered as aforesaid, against the plaintiff, and the payment of the same enforced by attachment, together with the costs of the motion, &c.

S. Tuttle, far defendants.

D. M. Porter, for plaintiffs.

This is a motion to compel judgment creditors to pay the costs of the defenses of a suit brought by a receiver appointed in a supplementary proceeding taken by them on execution against a judgment debtor. The Code provides (§ 321), that a person, of whom a cause of action shall become the property, after the commencement of an action upon it, shall be liable for the costs in like manner as if a party ; and the Revised Statutes (2d vol. 619, § 44) and the Laws of 1849 (chap. 390), provides that a person “ beneficially interested ” in the recovery in an action brought in the name of another, shall be as much hable for costs as a plaintiff.

In the case of Whitney agt. Cooper (1 Hill’s R. 632), it was held that persons holding a mortgage or hen were included

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in such definition. It was also held therein, that bringing an action might be by retaining an attorney, directly or indirectly, or engaging to pay his expenses, but it must be by some action on his part.

In Colvard agt. Oliver (7 Wend. R. 497), it was held that a cestui que trust came within the statute. In the first cited case, however, the court consider the statute intended to cover all cases where the interest of the party sought to be charged would be protected against the nominal assignee.

In the case of Miller agt. Franklin (20 Wend. R. 630), it was held that a person to whom a verdict had been assigned as collateral security, was not hable for any costs, and as the court strongly intimate, not even if he had taken part in the prosecution.

In Bliss agt. Otis (1 Denio's R. 656), and Giles agt. Halburt (2 Kern. R. 32), it was held that an interest to any extent in a recovery accompanied by interference and management of the suit, made the party interfering hable.

There is no evidence in this case of any interference by the judgdment creditors in the suit, either by directing it to be brought or subsequently taking any active managing part in it. This alone would be sufficient to exempt from liability as having brought it, and they were not the only parties interested. The receiver had an interest in his commissions and costs, and was hable to any other parties for their share of any of the proceeds of any judgment.

But I think the law was not intended to apply to cases of actions brought in the name of sheriffs, receivers, clerks or other officers of the court, although third parties might be interested in the recovery, unless the action was brought at the sole suggestion and urgency of such parties, and it was virtually conducted by them, and especially so to a case where an action was brought by direction or leave of the court. The case of Wheeler agt. Wright ( 23 How. 228 ), is directly in point, and must govern this case.

Motion denied, with seven dollars costs. Order to be settled on two days’ notice.