Carl v. Meyer

this obligation to be void; otherwise, to be in full force and effect.” It also contained the recitals of the proceedings and of the appointment of Frederick Carl as receiver. On December 11, 1889, Frederick Carl died, having failed to account, and, as was subsequently shown, had died intestate and insolvent, and there remained in his hands no part or parcel of the assets which he had received as such receiver. Meanwhile the action had been referred, and was partly tried at the time of the receiver’s death. It was not until 1898 that further proceedings were taken in the case. Christian Carl was, on the 15th day of February, 1898, appointed administrator of the estate of Frederick CaM, the deceased receiver. The action was revived, and Christian Carl, as administrator, was substituted as defendant, and thereupon the trial of the action proceeded, and resulted in a judgment settling the accounts of the partnership, and defining the interest of each co-partner in the assets of the co-partnership, and the interest of each partner in the co-partnership as between themselves. This judgment also provided in substance that the defendant in said action, within 10 days after the service upon him of a copy of said judgment and decree, as administrator of Frederick Carl, deceased, make and file in form and manner required hy law an account of the proceedings of Frederick Carl as receiver of the co-partnership assets of the firm of Frederick Carl & Bro. In pursuance of such provision, Christian Carl, as administrator of' Frederick ■Carl, deceased, accounted as the representative of such deceased receiver. To this accounting the defendants here, the sureties on the bond, were not made parties, and no notice of such accounting was ever given to them. A substituted receiver was also appointed, and he likewise accounted, but without any notice to the sureties upon the receiver’s bond. Immediatély after the ■entry of the said judgment this action was brought against the sureties upon the receiver’s bond, and the amount demanded was the sum indicated in the judgment as the amount of the interest of William Carl in the co-partnership as between themselves in account. The defendants contend that, inasmuch as the bond given by them was to William Carl, and not to the people of the state, as required hy section 715 of the Code of Civil Procedure, it was void as a statutory bond, and, not being in accordance with the order appointing Frederick Carl receiver, Frederick Carl never became such receiver, and hence they (the sureties) were not answerable for his neglect as receiver; and that, in any event, as no notice of any accounting was given to them, as required hy section 715 of the Code of Civil Procedure, and they not being parties to the judgment and the administrator’s accounting, no action would lie against them for the default under the bond. These several contentions were met by the plaintiff by his claim that the bond, if void as a statutory bond, was good as a common-law bond, and had ample consideration, and hence no accounting was necessary, no notice of such accounting to charge the sureties was obligatory, and that Frederick Carl, if not a receiver de jure, was a receiver de facto, had received the co-partnership assets, and, having died insolvent, with them still in his hands and unaccounted for, a breach of the condition of the bond was shown, and the plaintiff was entitled to a judgment for such amount as he could show was the interest of the plaintiff in the assets which came into the receiver’s hands, with interest, and for that purpose he was entitled to state the account of the de facto receiver in this action with like effect as though he, said receiver, had made such account with notice to the sureties. I am of the opinion that the position taken hy the plaintiff is correct. The case, it would seem, comes fully within the decision in Thompson v. Denner, 16 App. Div. 160 , 44 N. Y. Supp. 723 . The court had power to appoint Frederick Carl receiver, and to exact the bond. The defendants here executed it voluntarily, and without misapprehension, in order that Frederick Carl should become such receiver, and take into bis possession the assets of the co-partnership. The bond recited that he (Carl) had been appointed such receiver, and the sureties are estopped thereby from denying his appointment. Even if it, be true, as contended by defendants, that the bond is void as a statutory bond, yet it is good as a common-law bond. Voluntary bonds, not being illegal or against the policy of the law, may be good as common-law bonds, although, through some defect, they are not good statutory bonds. Goodwin v. Bunzl, 102 N. Y. 225 , 6 N. E. 399 ; McGowen v. Deyo,

8 Barb. 340 ; Fellows v. Gilman, 4 Wend. 414 . The consideration of the bond at bar was sufficient. It gave power to Frederick Carl to take possession of the assets, and the plaintiff, upon the execution of it, gave up possession of the assets of the firm to the receiver. There was, therefore, a good consideration for the bond. The sureties were, therefore, liable upon a breach of the condition of the.bond. Such breach occurred, and was clearly shown. The judgment in Carl against Carl, though not binding on them as to the amount of assets for which the receiver failed to account, was, nevertheless, evidence that the receiver was in default, and had failed to account, and the accounting of his administrator under this judgment was of the same force. Thompson v. Denner, supra. The bond being thus shown to be a common-law obligation running to William Carl, he is entitled to recover whatever interest he could show that he had in the assets which came into the receiver’s hands and were not accounted for. This is the measure of his damage, and the liability of the sureties as to him. He was, therefore, permitted to show the amount of assets which came into the receiver’s hands, and the sureties were permitted •to show what amounts had been paid out by the receiver, and what assets remained unaccounted for. The judgment in Carl against Carl and the administrator’s accounting were not binding, as I have said, upon the sureties, because they were not parties thereto; but they were binding upon William Carl, who was a party thereto, was heard, and had his day in court. When, therefore, they fixed the amount of his interest in the assets, he was bound thereby, and as against the sureties could not assert a greater claim, even though, as here, the proof would seem to show that the assets unaccounted for and his interest therein were greater than stated in the judgment and in the accounting. I have been unable to find that the evidence bears out the contention of defendants that the interest of William Carl was less than that shown on the administrator’s accounting. The loches complained of by the defendants, by reason of the long delay in the action of Carl against Carl, and urged as a defense, made no change whatever in the position of the sureties, and worked no hardship to them. Association v. Read, 124 N. Y. 189 , 26 N. E. 347 ; Goodwin v. Bunzl, 102 N. Y. 224 , 6 N. E. 399 ; Carter v. Hodge, 150 N. Y. 532 , 44 N. E. 1101 . The judgment provided that William Carl should have his costs and allowance to be first paid out of the assets. .This increased the interest of William Carl pro tanto, since the judgment was in his favor against Frederick Carl, who was the receiver, and eoneededly the assets which came into his hands were sufficient to pay William.Carl in full, depleting Frederick Carl’s interest in the assets to that extent. I have allowed nothing to the receiver for his fees as such. His conduct is sufficient warrant for such disallowance. I have added the interest on the costs from the date of the judgment, and upon the interest of William Carl in the assets from one year after the day of the death of Frederick Carl. And for these amounts I have given judgment to the plaintiff, with costs.

De Witt Bailey, for appellants.

Louis Cohen, for respondent.