In re Castle — 2 N.Y. St. Rep. 362

Majority

p. 362

In the matter of the petition of Charles D. Castle, as trustee for F. A. Crittenden, to obtain certain moneys from the county treasurer of Ontario county.

(Supreme Court, General Term, Fifth Department,

Filed June 17, 1886.)

Headnote

1. Assignment—Receiver.—Title to funds can not be determined bt ORDER.

Where a trustee for the assignee of funds held by a county treasurer in an action for partition has procured an order directing the county treasurer to pay over such funds to him, a receiver of the property of the assignor subsequently appointed in supplementary proceedings can not

p. 363

obtain title to the funds by an order setting the prior order aside. The title to the funds must be tried by action.

2. Costs against receiver personally.

Where the circumstances show that such a proceeding was instituted by the receiver carelessly and without permission of the court, costs may be awarded against him personally, and there need be no affirmative motion to that effect.

8. Same—Separate costs to parties on motion.

In this case the county treasurer having been served with the motion papers and having appeared by counsel, costs were rightly allowed to him.

Appeal by Edwin McKnight personally, and as receiver, etc., from an order of the Monroe special term.

In 1867 certain moneys, $4,987.86, derived from the sale of real estate in a partition suit, were by an order of the court deposited with the treasurer of the county of Ontario. The interest and income thereon to be paid one, Deborah Crittenden, during her life-time, and after her decease, to the heirs of William T. Crittenden. Thompson W. Crittenden was one and Mary Wilson another of such heirs, and each was to take one-fifth part of the said principal sum. Deborah died the 25th of October, 1885. In 1869 Thompson W. Crittenden assigned and transferred all his interest in remainder in said fund to Charles D. Castle, in trust, for the benefit of Frances A. Crittenden, who is the wife of said Thompson. In November, 1885, the trustee on an ex parte application, by a petition setting forth the foregoing facts, procured an order at the Ontario special term, directing the treasurer of Ontario county to pay over to him as trustee, one-fifth part of the said principal sum, which order was entered on the 14th of November, 1885.

Prior thereto, Edwin McKnight, in proceedings supplemental to execution in a judgmant wherein William T. Bassitt was the plaintiff and Thompson W. Crittenden was the defendant, was appointed receiver of the goods and effects of the said defendant. Upon affidavits setting forth, in substance, the proceedings in the partition suit and the proceedings had supplemental to execution, the receiver made a motion, which was heard at the Monroe special term, asking that the order directing the treasurer of Ontario county to pay over the said moneys to said Castle as trustee be revoked and set aside, and for an order restraining the county treasurer from paying over any of said moneys to said Castle; and also for an order restraining the said Castle from transferring or disposing, or in any way interfering with any interest which the said Thompson W. Crittenden might have in the said fund, and for such further order as to the court might seem just and proper. This motion was in all things denied, with ten dollars costs to Castle, and ten dollars costs to the county treasurer, to

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be paid by the receiver personally. From that order McKnight, the receiver, appeals.

Barhite & Reed, for appellant; H. M. Field, for C. D. Castle; John Callister, for the county treasurer.

The motion was properly denied. Without action instituted for that purpose, the receiver was in no position to question the validity of the transfer of the fund in the hands of the county treasurer by Thompson W. Crittenden to Charles D. Castle, as trustee. The court could not acquire jurisdiction over the subject matter, nor of the parties by a motion of this character.

The court, in awarding costs, had the power to-determine whether they should be paid out of the funds in the hands of the receiver or by him personally. The facts upon which that question might be determined were sufficiently disclosed, as the proceedings were initiated and determined upon the papers now before the court. There is no rule of practice which requires the successful party in a proceeding of this nature to make an affirmative motion to determine whether or not the receiver or trustee should be personally charged with the costs. In some instances such a motion is necessary for the purpose of bringing to the attention of the court the facts and circumstances upon which the question is to be determined. Plainly, this is not such a case. It would seem to be absurd to drive the defendant to such a motion. It is the customary practice to determine upon the hearing- and upon the facts there disclosed whether a receiver or other trustee should be personally charged with motion costs.

We are not disposed, after a careful perusal of all the affidavits, to interfere with the direction of the special term, charging the costs on the receiver personally. We think there is room for saying that in making the motion he was guilty of mismanagement of a matter over which he had charge as trustee, so as to bring the case within the provisions of section 3246 of the Code of Civil Procedure. The purpose of the motion was to review and set aside a previous order of the court and to restrain a public officer. This necessarily involved an inquiry into the title of the fund and the validity of the transfer. The questions of fact and of law involved in that inquiry were serious and important, and the receiver must have been advised that his motion would be strenuously opposed by the trustee and the beneficiary.

The receiver instituted these proceedings without asking permission of the court after a rule or order relating to the same subject matter had been made by the court. Nor was there any attempt on his part to comply with the other requirements of the standing rule on the subject. Rule 79.

p. 365

The provisions of that rule were intended for the protection of the receiver as well as of adverse litigants. The action of the receiver, as it seems to us, was ill-advised and inconsiderate; we cannot resist the conclusion that the receiver had confided the management of this matter to the judgment of the pursuing creditor and neglected to give the matter that personal consideration and attention which the duties of his office required.

The motion papers were directed to the county treasurer. The order denying the motion recites that he appeared by counsel on the nearing, and thus a case was made for allowing him costs, as well as separate, costs to the trustee. We conclude not to give costs to the respondents on this appeal. Order affirmed.

Smith, P. J., Haight and Bradley, J.J., concur.