Peck v. Disken

This is a motion by the defendant to vacate an order appointing a receiver of his property. Two judgments, aggregating in amount $2,715.92, were recovered by the plaintiffs against the defendant on February 12, 1891. Executions upon these judgments were issued April 9, 1891, and were returned unsatisfied. No other action was taken until May 28, 1903, when a third party order was issued by a. justice of this court directing Marie A. Herter and the Empire State Surety Company, to appear for examination for the purpose of discovering property 'belonging to the defendant. The defendant was not served with any order in proceedings supplementary to execution, and no notice of the proceedings to examine witnesses was served or attempted to be served upon him. The ex-

The defendant moves to vacate the order appointing the receiver upon several grounds, but particularly upon the ground that the proceedings supplementary to execution were instituted more than 10 years after the recovery of the judgments upon which they were founded, and the return of executions thereon. If the proceedings supplementary to execution were illegally instituted, it follows that the order appointing the receiver must be vacated.

Section 24?q of the Code of Civil Procedure authorizes the institution of proceedings supplementary to execution, to examine a judgment debtor “at any time within ten years after the return, wholly or partly unsatisfied, of an execution against property, issued upon a judgment,” etc. The time fixed by this statute is a statute of limitation, prescribing the period within which these proceedings may be instituted. The return of the execution starts the time running, and the right is barred after the expiration of ten years from that time.

In Importers’ & Traders’ Nat. Bank v. Quackenbush, 143 N. Y. 567 , 38 N. E. 728 , Judge O’Brien said:

“We think that, when the statute gave the creditor ten years from the date of the return of an execution to obtain the order, this period was intended as a limitation. The right accrued after the return of the first execution, and became barred after the lapse of ten years, in the absence of some new proceeding to revive it to which the debtor is a party by notice or otherwise.”

It is urged by the judgment creditor that the 10-year limitation is not applicable to an order to examine a third party, but only to an order to examine a debtor. I do not think that this construction is tenable. The remedy permitting the judgment creditor to examine a person having property of the debtor is distinct from the remedy to examine the judgment debtor. Both of these remedies, however, are to be taken advantage of in the same proceeding, and both are dir rected against the property of the judgment debtor. Section 2441 of the Code of Civil Procedure authorizes an order to examine a person having property of the judgment debtor, and no period of limitation is therein prescribed. This section of the Code provides that:

“Upon proof, by affidavit, or other competent written evidence, to the satisfaction of the judge, that an execution against property has been issued, * * anci either that it has been returned wholly or partly unsatisfied, or that it has not been returned * * * the judgment creditor is entitled to an order,” etc.

It will be noticed that not only does this section fail to prescribe any time within which the execution must issue, but, so far as the letter of the statute is concerned, the creditor might institute these proceedings even after 20 years, when the judgment itself has be

Section 388 of the Code of Civil Procedure provides that “an action, the limitation of which is not specially prescribed in this or the last title, must be commenced within ten years after the cause of action accrues.” This section is the general statute adopted in the Code as a precautionary measure, to cover cases inadvertently omitted, or not otherwise provided for. Galway v. Metropolitan E. R. Co., 128 N. Y. 132 , 142, 28 N. E. 479 , 13 L. R. A. 788 . It was in the Code of 1848, and has since been continued. It has done away with the old rule in cases cognizable only in courts of equity, and subjected all alike to some statutory limitation. Loder v. Hatfield, 71 N. Y. 104 . It applies to any and every form of equitable action. Gilmore v. Ham, 142 N. Y. 1 , 6, 36 N. E. 826 , 40 Am. St. Rep. 554 . Proceedings supplementary to execution are remedies in equity for the collection of the creditors’ judgment, and were intended as a substitute for the creditors’ bill as formerly used in chancery. Importers’ & Traders’ Nat. Bank v. Quackenbush, 143 N. Y. 567 , 571, 38 N. E. 728 . While section 388 refers to “an action,” and the time when “the cause of action accrues,” section 414 of the Code of Civil Procedure provides that “the word ‘action’ contained in this chapter, is to be construed, when it is necessary so to do, as including a special proceeding, or any proceeding therein, or in an action.”

The application of the limitation prescribed by section 388 to supplementary proceedings has been recognized by the Court of Appeals.

“By section 388 of chapter 4, ten years is fixed as the limitation in all cases not specially prescribed in the first two titles, and, while the chapter speaks of actions, * * * the later sections [sections 414, 415] include special proceedings,- and the accruing of rights to institute the same. And hence it follows that by chapter 4 a limitation for the institution of summary [supplementary] proceedings is fixed at ten years from the accruing of the right. Section 2435, in a later chapter, fixes the same limitation, and not a ‘different’ one; and, since it is not different, it fails to exclude supplementary proceedings from the operation of chapter 4, and so the further provision of section 414 applies, as I think was the Legislature’s intention.”

If the limitation prescribed by section 388 is applicable to section 2435, it is equally applicable to section 2441, under which a person having property of a judgment debtor may be examined in proceedings supplementary to execution. Inasmuch as the judgment credit- or did not assert this right within 10 years, which is the period of limitation prescribed by statute, it is lost, and the order appointing a receiver of the property of the debtor must be vacated.

Courts will aid the judgment creditor in securing payment, but the judgment creditor’s right is like all other rights to recover a debt, and it may be lost by delay. “It may be safely asserted” said Judge O’Brien in Importers’ & Traders’ Nat. Bank v. Quackenbush, supra, “that every remedy which a creditor has by law for the enforcement of the debt becomes barred by the lapse of some definite period of time, and when barred it cannot be revived at his mere will and pleasure, without some new proceeding for that purpose of which the debtor has notice.” Such, it seems to me, is the situation disclosed upon this motion. The original right of the creditor is not disputed, but the laches of which he has been guilty interposes a barrier to his further efforts to enforce it. The motion is granted, with $10 costs.

Motion granted, with $10 costs.