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In re Loos

3 N.Y.S. 383 Court N.Y. Sup. Ct. English

Delivered by *385 Hardest, P. J., (after stating the facts as above.)

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p. 383
In re Loos et al.
(Supreme Court, General Term, Fourth Department.
November, 1888.)

Headnote

"Execution—Sale—Receiver—Leave oe Court.
A sale of land under a valid judgment, entered before the appointment of receivers in a creditors’ action, is valid, though made after the receivers are appointed, and without leave of court. Following Bank v. Risley, 19 N. Y. 399 . Follett, J., dissenting.
Appeal from special term, Onondaga county.
This is an appeal from an order granting the prayer of the petition of Conrad Loos and others to set aside a judgment sale of certain real property. The ifnportant part of the order is in the following language, viz.: “It is ordered that each and every one of the purported sales of the interest of J. Forman Wilkinson in the real estate mentioned and described in said moving papers be, and the same is hereby, vacated, annulled, and set aside as irregular and
p. 384
void, upon the ground that said real estate was, at the time of such purported' sales, and for a long time prior thereto, in the possession of receivers appointed by this court, as set forth in said moving papers, and no leave or per— mission was obtained from the court to make said sales. * * *” The 3d day of January, 1885, the Merchants’ National Bank recovered a judgment for $30,807.99, against J. Forman Wilkinson, which was docketed in the■ clerk’s office of Onondaga county; and on the 4th day of February, 1885, the-same bank recovered a judgment against him for $10,380.83. Executions-were issued on those judgments, and returned unsatisfied. Thereafter a. creditors’ action was brought in behalf of said bank to set aside a certain deed and mortgage and assignment referred to in tlxe petition herein. Issue was-joined in that action, and it was tried and decided in favor of the plaintiff therein, setting aside the several covenants mentioned. A similar action was-brought by Loos and others after return of executions; and another similar-action was brought by Bates and others; and, after issues joined therein, “the three actions were brought to trial at the same term of this court, and a. decision rendered in all three actions in favor of plaintiffs; that findings were thereafter prepared and settled in all three cases at the same time; that subsequently, and on or about the 27th day of September, 1886, judgment was entered in said action brought by said Merchants’ National Bank of Syracuse, adjudging that said conveyances were fraudulent and void as to the said bank, and setting the said conveyances aside. On the 20th day of August, 1886, am execution was issued by the Merchants’ National Bank upon its judgment of $30,807.99, and the interest of J. Forman Wilkinson in the parcels of real, estate described in the petition were sold on the 29th day of August, 1887, by the sheriff of Onondaga county, who issued certificates to the purchaser in the-usual form, which were recorded in the clerk’s office of Onondaga county. The judgments in the creditors’ actions of Bates and others, and of Loos and others, were entered September 18, 1886. The judgment in the creditors’ action of the Merchants’ National Bank was entered September 27, 1886. By virtue of the judgment entered in tlie Bates action, and in the Loos action, Hubbell and Hiscock were appointed receivers. In the creditors’ action of the Merchants’ Bank no receiver was appointed, but the judgment for $30,-807.99 and the judgment for $10,380.83 were recited, and following that recital was the following provision, viz.: “ Which judgments are, and each of them is, a lien upon said real estate from the time the same were docketed in Onondaga county, and that the same be so enforced.” In the creditors’ action of Bates and others it was provided as follows: “And it is further adjudged and decreed that said receivers sell the said premises and real estate at public auction, according to the usual course and practice of this court, and. upon such sale execute a conveyance of the same to the purchaser or purchasers at such sale; that either or any of the parties to this action may purchase at such sale, but the said conveyance by said Wilkinson and said Hubbell to-said receivers, and their acceptance thereof, and any sale and conveyance by said receivers, shall be subject to, and shall not affect, the judgment liens of' the plaintiffs on said premises, as judgment creditors, upon their judgments, or their right to enforce the same, by execution and sale, or any other proceedings upon the said judgments, according to their rights thereunder.” Folio-130. In the papers used upon the motion there is some controversy in respect to whether or no the receivers took possession of all the property mentioned in the petition, but, as the special term found the fact favorable to the petitioners, it is not deemed necessary to consider that question in detail by the-further reference to the conflict in the affidavits upon that subject. The Merchants’National Bank and the purchaser at the sales made on the 29th of" August, 1887, have appealed from the order.
Argued before Hardin, P. J., and Martin and Follett, JJ. "
W. &. Tracy, for appellants. Frank H. Hiscock, for respondents.

The appellant insists (1) that the provisions in the judgment in the creditors’ action in behalf of the Merchants’ national Bank were equivalent to a permission to the creditor to enforce its judgments by execution; (2) that the court below erred in “refusing to grant an order nunc pro tunc allowing the sale, and this court should now grant such order; and (3) no leave of the court was necessary before the judgment creditor could sell.”

Inasmuch as the special term has placed its order “upon the ground that such real estate was at the time of such purported sales in possession of the receivers appointed by this court, * * * and no leave or permission was obtained from the court to make such sales,” the review of its order may be confined to the grounds named therein. The opinion of the learned judge at special term is rested upon Walling v. Miller, 108 N. Y. 173 , 15 N. E. Rep. 65 . That case related exclusively to personal property. It had been levied upon by the sheriff on the 12th of May, 1883, and two days thereafter a receiver of the property was appointed, and on the same day took possession of the property; and it was said: “The sheriff had no right to interfere with it by virtue of his lien under the execution in his hands;” and, in an action by the purchaser at sheriff’s sale, it was held that such sale, “ under the execution, without leave of the court, while the property was thus in the custody of the court, was wholly illegal and void.” Upon an examination of the opinion delivered in that case, it is found that the eases of Noe v. Gibson, 7 Paige, 513, and Bank v. Schermerhorn, 10 Paige, 263, and Wiswall v. Sampson, 14 How. 52 , are cited as authority for the doctrine laid down. The case of Noe v. Gibson, 7 Paige, 513, and Bank v. Schermerhorn, 10 Paige, 263, both related to personal property. The case of Wiswall v. Sampson, 14 How. 52 was a case originating in Alabama, and the property was sold under a judgment of one court, while in the possession of a receiver appointed under a judgment of another court. If the principle laid down by the court of appeals in Walling v. Miller, 108 N. Y. 173 , 15 N. E. Rep. 65 , is applicable to real estate and judgment liens upon it, then the learned judge at special term was warranted in following the doctrine of that case. But we think the question involved on this appeal was more directly involved in the case of Bank v. Risley, 19 N. Y. 369 . After reference to the early case of Angel v. Smith, 9 Ves. 335, in respect to the effect of a sale without leave of the court after a receiver is appointed, it was said in the opinion by Comstock, J. l “27ow, in this practice of the court of chancery I see nothing even to suggest a doubt of the validity of a title acquired by sale under a judgment, which is-a legal lien upon the land sold prior and paramount to the title or possession of' a receiver. It may be that the creditor should ask leave of the court of chancery before he proceeds to sell, or that the purchaser acquiring the title should make a like application before he brings his ejectment. If, however, he fails, to do so, the question is merely whether the court will consider him in contempt, and punish him accordingly. The sale itself is but the assertion of a, legal right, and it cannot be illegal and void on the ground that the leave of an equitable tribunal is not first asked and obtained. It maybe that the case of Wiswall'y. Sampson, in the supreme court of the United States, ( 14 How. 52 ,) goes to the extent of laying down a different doctrine. If so, we are constrained to say that we cannot follow that decision. The result is that White, by the decree in the chancery suit annulling the debtor’s fraudulent assignment, and by the receiver’s sale and conveyance, acquired a title to the premises in question, subject to the lien of judgments docketed prior to the commencement of that suit in favor of persons not parties thereto. On one of those j udgments the sheriff sold, and the plaintiffs have the conveyance under that salé. They are therefore entitled' to recover the premises, so far as we have yet examined the case.” The verdict which had been ordered for the plaintiff was sustained, and it is very clear, from an examination of the

p. 386
/case, that the question referred to in the quotation we have made was directly ¿involved, and pointedly resolved in favor of the plaintiff. We are not aware rthat the case has been disturbed by any authority expressly referring to the .question h'>re involved. Until the question shall be held otherwise by the (ultimate court, it seems reasonable to regard the case as an authority for upholding a sale made upon a valid prior judgment in virtue of an execution issued thereon prior to the appointment of any receiver. The case was referred to as an authority in Bank v. Farthing, 101 N. Y. 347 , 4 N. E. Rep. 734 , in which case Andrews, J., said, in respect to a decree setting aside a fraudulent conveyance, viz.: “If it simply sets aside the fraudulent conveyances, the land will remain charged with the liens of the several judgments in the order of their docketing, and the proceedings to enforce them will be regulated by the statute. If it goes further, and appoints a receiver, and directs a conveyance to him, a purchaser under the receiver’s sale will take title as of the time of the debtor’s conveyance to the receiver; subject, however, to the j udgments in favor of the banks other than the plaintiff. ”

1 ’It may be observed that it is quite apparent, from the affidavits used in opposing the motion, that there was no intent to violate the rules of practice in respect to the receiver and his rights and privileges; and it is inferable that the counsel for the Merchants’ Bank and the purchaser supposed that the sale on the execution was enforcing the judgment in favor of the bank, not only in accordance with the statute giving a lien and authorizing an execution to enforce a lien of a judgment, but that such sale was virtually authorized by the several decrees entered in the creditors’ action. However, the conclusion reached upon this appeal rests for its support largely upon the authority of Bank v. Risley, supra. Order reversed, with $10 costs and disbursements.

Martin, J., concurs. Follett, J., dissents.

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