Milliken v. Fidelity & Deposit Co. of Maryland

The answer denies knowledge or information sufficient to form a belief as to whether the judgment is now due from the defendant to the plaintiff, or as to whether plaintiff has duly performed all the conditions on his part required, or as to whether the amount due on said undertaking is due from defendant to plaintiff. In its second separate and distinct defense it alleges that prior to the recovery and entry of said judgment, and on the 18th of May, 1906, in an action then pending in this court wherein one Arthur C. Booth was plaintiff and the plaintiff herein was defendant, a warrant of attachment against the property of said Milliken duly issued to the sheriff of the county of New York, and a levy was on said day duly made thereunder upon a certain claim or cause of action owned and held by said Milliken against said Napoleon Dotson for the recovery of $25,000, with interest thereon from November 10, 1905; that the suit wherein said judgment of May 19, 1906, was recovered by said Milliken had been brought by him against said Dotson to recover said $25,000 and interest, and that upon the recovery of such judgment the claim or cause of action so in suit was merged therein, and said judgment thereupon became subject to the lien of said levy; that on October 4, 1907, judgment was entered in said action of Booth v, .Milliken in favor of the plaintiff therein and against said Milliken for $226,628.93 damages and costs, but on appeal by said Milliken the Appellate Division ordered said judgment reversed and the complaint in said action dismissed, with costs to the defendant therein in the Appellate Division and in the court below; and thereafter, and prior to the commencement of this action, and on July 28, 1908, final judgment was accordingly entered in said action reversing said judgment of October 4, 1907, and dismissing the complaint, with $533.60 costs; that prior to the entry of said final judgment in favor of defendant in said action of Booth v. Milliken, and on July 27, 1908, an order was duly entered therein staying all proceedings on the part of .said defendant from and after the entry of said judgment, except to serve upon the attorneys for plaintiff therein a copy of said judgment, with written notice of e'ntry thereof, until the expiration of 10 days after the service of such copy and notice; that pending the stay of proceedings so ordered, and on or about July 30, 1908, plaintiff in said action of Booth v. Milliken duly appealed to the Court of Appeals from said final judgment of July 28, 1908, dismissing the complaint therein, with costs, as aforesaid, and gave an undertaking as required by statute to perfect such appeal and to stay the execution of the judgment'appealed from, and such appeal is still pending and undetermined, and the execution of said judgment is still stayed; that prior to the entry of said final judgment of July 28, 1908, in said action of Booth v. Milliken, and prior to the commencement of this action, this defendant had actual notice of said warrant of attachment and .the said levy thereunder.

Chapter 166, p. 462, of the Laws of 1908, added a new section to the Code of Civil Procedure, known as 547, as follows:

“If either party is entitled to judgment upon the pleadings, the court may, upon motion, at any time after issue joined, give judgment accordingly.”

We think that the allegation of the answer that in an action then pending in this court, wherein one Arthur C. Booth was plaintiff and the plaintiff herein was defendant, a warrant of attachment against the property of said Milliken duly issued to the sheriff of the county of New York and a levy was on said day duly made thereunder upon a certain claim or cause of action owned and held by said Milliken against said Dotson for the recovery of $25,000, with interest thereon from»November 10,1904, was sufficient, and that thereunder proof was admissible to show that the claim or cause of action alleged to have been fully attached was one arising upon a contract belonging to the defendant and found within the county, and hence subject to attachment under the provisions of section 648 of the Code of Civil Procedure, and if the attachment was duly levied upon said cause of action, as alleged, it became merged in the judgment in the action then pending to recover thereon, and the said judgment became subject to the lien of said attachment. Arkenburg v. Arkenburg, 114 App. Div., at page 445, 99 N. Y. Supp. 1127 .

The situation then presented is as follows: Milliken sued Dotson and obtained a judgment. Dotson appealed, and the defendant surety company gave an undertaking upon that appeal. The Appellate Division affirmed that judgment. Upon the entry of judgment of affirmance, the liability of the surety company to pay the amount of the judgment against Dotson to Milliken accrued; but Booth, suing Mil-liken, attached Milliken’s claim against Dotson before judgment rendered therein, and Booth secured in his suit judgment against Milliken, but this judgment was reversed on appeal, and judgment upon said reversal was entered against Booth for costs and disbursements.. By the entry of that affirmative judgment in favor of Milliken against Booth, the attachment obtained by Booth on Milliken’s claim against Dotson was annulled.

Section 3343, subd. 12, of the Code of Civil Procedure, provides that:

“A warrant of attachment against property is said to be annulled when * * * a final judgment is rendered therein in favor of the defendant.”

But the answer alleges that prior to the entry of said final judgment an order was duly entered therein staying all proceedings on the part of said defendant from and after the entry of said judgment, except to serve upon the attorneys for plaintiff a copy of said judgment, with written notice of entry thereof, for 10 days, and that, pending the stay of proceedings so ordered, plaintiff in said action of Booth v. Milliken duly appealed to the Court of Appeals, and gave an undertaking as required by statute to perfect such appeal and to stay the execution of the judgment appealed from. And subdivision 12 of section 3343 of the Code, supra, further provides:

“But in the case last specified [that' is, when a final judgment is rendered in favor of the defendant] a stay of proceedings suspends the effect of the annulment, and the reversal or vacating of the judgment revives the warrant”

“The undertaking on appeal, upon which this action is brought, was dependent upon and followed the judgment appealed from. The payment or satisfaction of the judgment would discharge the undertaking, and an assignment or transfer of the judgment would carry with it the security of the undertaking, though not mentioned in the transfer. The sureties on the undertaking were bound to pay only the lawful holder of the judgment, and on such payment were entitled to subrogation to all the rights and remedies of the holder of the judgment for its collection. * * The judgment being the principal debt, and the undertaking collateral security, it passed with the principal debt, and the right to collect that necessarily included the right to enforce the collateral security. It was not necessary to attach the undertaking separately. It was an incident of the judgment, and not an independent liability of the sureties. The sureties were not bound to pay the original judgment creditor after her right to collect the judgment had been transferred to the sheriff. * * * Before the judgment creditor can maintain this action against the sureties, she must cause the attachments to be discharged.”

But the appellant claims that this action was begun on the day intervening between the entry of the judgment which annulled the attachment and the day when the undertaking on appeal from that judgment to perfect the appeal and to stay the execution was given on appeal to the Court of Appeals. But the answer alleges that prior to the entry of said judgment an order was duly made staying all proceedings after the entry of judgment. The appellant claims that the provisions of the section of the Code hereinbefore cited, suspending the annulment upon a stay of proceedings, refers only to the stay of proceedings caused by the giving of the undertaking upon appeal, to perfect the appeal and to stay the execution, and that, as his action was commenced before said undertaking was given, the provisions of the statute suspending the annulment did not apply.

If the contention is correct, this possible result might follow: That the surety company would be now compelled to pay the amount of the judgment obtained against Dotson to Milliken. If the Court of Appeals should reverse the judgment in favor of Milliken in the case of Booth v. Milliken, and thereafter Booth should obtain judgment against Milliken, and the attachment in Booth’s favor of Milliken’s claim against Dotson should be held good, the company would be compelled to pay to Booth the Dotson judgment. We think the statute is not susceptible of an interpretation which would bring about such a result; that the stay of proceedings which suspends the annulment of the attachment is not confined to that stay which follows upon the undertaking on appeal which stays execution, but refers to any of the duly entered orders of the court, which, for the purpose of preserving the status quo, stays proceedings.

In McKean v. National Life Association, 24 Misc. Rep. 511 , 53 N. Y. Supp. 980 , a motion was made to cancel a notice filed with the

“The stay is still operative. Furthermore it appears that plaintiff has served a notice of appeal and intends in good faith to prosecute his appeal and to stay proceedings during its pendency in the manner provided by law.”

And after quoting section 3343, subd. 12, of the Code, the court proceeded:

“The counsel for defendant contends that the stay of proceedings thus referred to means something more than a stay of execution such as the plaintiff now has or may acquire on giving security on appeal. In this I find myself unable to agree with him. What other kind of stay of proceedings after entry of a money judgment could be obtained, or even would be desirable, it is somewhat difficult to imagine. • Clearly what the Legislature had in mind was the protection of the plaintiff in whatever he had secured under his attachment pending an appeal or motion to- vacate. * * * It was therefore provided, as I read the statute, that the effect of the annulment should be suspended if proceedings for the enforcement of the judgment are stayed during the pendency of the attack upon the judgment by motion to vacate it or on appeal. I am, therefore, of the opinion that the effect of the annulment of the warrant in this case is suspended by the stay which has been granted.”

In Henry v. Salisbury, 33 App. Div. 293 , 53 N. Y. Supp. 834 , this court said:

“By this statute, when the judgment for the defendant was entered the warrant was annulled; that is, it became entirely vacated and of no force for all purposes. But, although it was annulled, it was clearly not the intention of the Legislature that it should be finally done away with or that its lien should be lost, because the subsequent provision of the section quoted just above expressly suspends the annulling of the warrant until the appeal has been finally determined, where an-appeal has been taken with a stay of proceedings. * * * So long as the appeal is pending with a stay, the annulment is suspended ; and, if the judgment should be reversed, by the express provisions of the statute the warrant of attachment-would be reinstated."

In Friede v. Weissenthanner, 27 Misc. Rep. 518 , 58 N. Y. Supp. 336 , an attachment was issued upon the application of the plaintiff who was unsuccessful at the trial, and against whom judgment was entered on the 17th of November, 1898. On November 33d the defendant procured an order to show cause why the attachment should not be vacated. The Special Term of the City Court denied the motion. The General Term of said court on appeal reversed that order arid vacated the attachment. On appeal to the Appellate Term, Judge Leventritt said, in reversing the General Term, referring to this Code provision:

“The enactment of this provision was intended to protect the plaintiff in the event of a reversal of an erroneous determination of the issues at the trial court. Otherwise, his victory might be barren; for, even though successful on appeal, the plaintiff would find all the benefits acquired by his levy under the attachment dissipated by the prior nullification. To avoid that result the Legislature, without continuing the life of the attachment, suspended the effect of its annulment. Pending the appeal there is nothing to enforce or vacate. The stay does not alter the situation, because, notwithstanding its existence, the provisional remedy is nullified. But, if the appeal results favorably to the plaintiff, then, in order to relieve against all the -consequences of the error below, the law, as it were, re-creates the attachment, by reviving it and restor

ing to it the life it had before the nullification. The reversal reaches back and reinvests the plaintiff with all .the rights enjoyed before the error was committed. Henry v. Salisbury, 33 App. Div. 293 , 53 N. Y. Supp. 834 ; McKean v. National Life Association, 24 Misc. Rep. 512 , 53 N. Y. Supp. 980 . Whatever form the attack may take during the period between the rendition of the judgment and the determination of the appeal, whether supported by affidavits or resting on the judgment alone, it must fail, because nothing exists against which it can be directed.”

We think, therefore, that the determination of this case comes back to the question of whether or not the attachment was levied upon an attachable claim, and that, as the answer was sufficient to permit proof thereof, the order appealed from, denying the motion for.judgment upon the pleadings, was correct, and should be affirmed, with costs and disbursements to the respondent. All concur.