Willis v. Sharp

Headnote

1. Receivebs—Liabilities—Unautuokized Payments.

After judgment in an action against an executor, a receiver of the estate was appointed, and directed to pay the -judgment out of the funds transferred to him. The receivership was afterwards extended, by order, to judgments recovered against the executor in a second suit by the same plaintiffs, and in a third suit by other parties, and the receiver was directed to pay those judgments out of the fund, after reserving the amount of the first judgment, from which an appeal had been taken; but he paid out the whole fund, less his commissions, etc., on the two later judgments. All the suits were brought by the same attorney. Reid, that on the reversal, on appeal, of the original order appointing the receiver, as erroneous, though not void, the receiver must restore to defendant the amount of such two judgments so paid by him.

'•2. Same—Costs of Receivership.

Plaintiffs in the first suit should be held liable for the expenses of the receivership, and should also restore the amount of their second judgment.

Appeal from special term, Kings county.

Action by William P. Willis and William H. Townsend against Aurelius Sharp as executor of Pida C. Sharp, deceased, in which plaintiffs recovered judgment, and a receiver of the estate in the hands of defendant, as such ■executor, was appointed. Upon the reversal, on appeal, of the order appointing the receiver, a motion was made by defendant to require the receiver and plaintiffs to restore the fund transferred to the receiver. The following opinion was rendered on the motion for restitution at special term, by Cullen, J.:

“In suit No. 1 between these parties, Mr. Bitch was appointed receiver of the estate in the hands of the defendant, as executor, and out of such funds ■directed to pay the judgment previously recovered. From the order appoint.ing such receiver, and directing the transfer of the fund to him, the defendant appealed, and the order was reversed by the court of appeals. 22 N. E. Rep. 149 . Pending the appeal, the defendant complied with the order, and transferred the fund to the receiver. During this period, the plaintiff instituted a second suit, and the creditors, Cutter et al., instituted a third suit ■against the defendant. By the judgments recovered in these two last-named actions, the prior receivership was extended, and the receiver directed, out of the funds in his hands, after reserving the amount of the first judgment, (then on appeal to the court of appeals,) to pay the amounts of such judgments. This application is that the plaintiffs in this action and the receiver restore to the defendant the whole fund so transferred. The answer made to the application is that the receiver has paid out the whole fund, less his commissions, etc., on account of judgments in action No. 2, and in Cutter et al. v. Sharp, and that such judgments have not been appealed from, but remain in full force. While the order appointing the receiver was reversed, the court appeals do not seem to have held it void. I shall assume, therefore, it was valid though erroneous. If this view be correct, the receiver, being an offi■cer of the court, should not be liable personally where he has complied with the orders of the court, but the defendant should look for restitution to the plaintiffs, who have received the fund. But it appears here that the receiver, instead of paying the judgment in Willis v. Sharp, No. 1, or retaining moneys sufficient for the purpose, paid out all the fund on account of judgment No. 2, and judgment in Cutter v. Sharp. As the plaintiffs’ attorney was the same in all these actions, I assume it was with the assent of the parties, and it may be suspected that this was done to avoid the effect of an adverse decision on the appeal in this action, as no appeal was taken in No. 2, nor in Cutter v. Sharp. Nevertheless, this was not authorized, but in contravention of the terms of the orders and judgmen ts of this court, and the defendant cannot be prejudiced thereby, as it is not alleged that he assented to it. The receiver must therefore restore the amount of such judgments, with interest from the time of the judgment, and look for indemnity to the parties who induced this action.

“The next question is as to the liability of the plaintiffs to make restitu • 4ion. They instituted the proceeding, but, unless the receivership was void, I think they should not be liable for the whole fund, regardless whether they ¡have had the benefit of it. They should be held liable for the expenses of the receivership, in my opinion, for the reason that they instituted the proceedings for the collection of their judgment, and the case is analogous to the recovery of money paid to the sheriff on the execution on a judgment subsequently reversed, where it would seem that recovery can be had for the whole sum paid on the execution, which would include the sheriff’s fees. Kidd v. Curry, 29 Hun, 215 ; Sturges v. Allen, 10 Wend. 354 . In action No. 2, the judgment did not provide for a receiver of the estate, and the payment of the

recovery by the receiver. That was directed by an order made subsequent, to the judgment. The money had already been taken from the defendant, by the order in this action. That order has been reversed. As it was the foundation of the proceeding by which the plaintiffs obtained the amount of the-second judgment, I think, on its reversal, the title of plaintiffs to the moneys fails, and they should make restitution.' The motion granted to the extent indicated, with $10 costs. As to the remainder of the sum paid over to-the receiver, the defendant must proceed against Cutter et al.”

From the order entered on this decision, plaintiffs and the receiver appeal.