Guggenheimer v. Stevens — 26 N.Y. St. Rep. 245

Majority

p. 245

Randolph Guggenheimer, Pl’ff, v. Mark S. Stevens, Def't.

(City Court of New York, Special Term,

Filed October 10, 1889.)

Headnote

Supplementary proceedings — Receiver—Rights of creditors to funds.

Plaintiff commenced supplementary proceedings, which were continued, pending which a receiver of the debtor was appointed in other proceedings, and the receivership was extended to plaintiff’s judgment. Held,

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that the fund in the receiver’s hands was held by him for those who established a right to it by priority, and that plaintiff having priority, both as to the date of his judgment and the commencement of his proceedings, was entitled to the fund.

The plaintiff recovered a judgment against the defendant, May 28, 1877, for $421.35, which is now owned by Matthew Hagen, as assignee thereof.

"William H Moynan is the assignee of a judgment recovered against the defendant, December 22, 1877, for $1,091.66. The judgment debtor’s mother died October 1, 1884, and by her death the judgment debtor, as one of her heirs at law, became entitled to an undivided share of her real estate, and the judgments became a lien on such interest On August 26, 1886, Hagen commenced supplementary proceedings oh the judgment held by him, which were thereafter continued by adjournments. On February 3, 1887, Moynan commenced supplementary proceedings on his judgment, and had Frank B. Smith appointed receiver of the judgment debtor. On February 14, 1887, the receivership of Smith was extended to the judgment recovered by the plaintiff. A partition or foreclosure sale was had of certain property left by the defendant’s mother, and after paying incumbrances, etc., there was a surplus of $453.83 coming to the judgment debtor. This sum was paid over-to, and is now held by, the receiver awaiting the decision of this motion, which is to determine which of the. two judgment creditors is entitled to the fund.

George P. Gough, for pl’ff; W. H. Townley, for Moynan; F. E. Smith, receiver, in person.

Surplus moneys arising from the sale of real estate are, for the purpose of determining the priority of the liens thereon, regarded as the land from which the fund emanated. Such liens are transferred from the land to the surplus, and the moneys must be applied to the discharge of such liens according to their priority. Averill v. Loucks, 6 Barb., 470 ; Matthews v. Duryee, 45 id., 69; S. C., 17 Abb. Pr., 256 ; Blydenburgh v. Northrop, 13 How. Pr., 289 . So considered, the judgment recovered by the plaintiff, being prior in time, is prior in right, notwithstanding the order appointing the receiver. Chautauqua Co. B'k v. Risley, 19 N. Y., 369 . If both judgments are to be treated as if they had ceased to be liens, more than ten years having elapsed since their recovery, Floyd v. OlarJc, 2 Law Bull., 36, the result is the same, as the extension of the receivership to the judgment recovered by the plaintiff made the title of the receiver relate back to the time the plaintiff’s supplemental order was served. Code, § 2469, subd. 1. The evident object of this provision was to preserve the rights and liens of the different judgment creditors according to their respective priority, in conformity to the rule that different proceedings against the same debtor, or in pursuit of the same property, shall take precedence according to the respective dates of their commencement. The fund in the receiver’s hand's is not however, to be deemed the property of the party at whose instance he was appointed, but it is in custodia legis for those

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who shall establish a.right to it according to the respective priorities. Banks v. Potter, 21 How. Pr., 474 , and cases cited. The rights and priorities of the respective parties having been preserved intact, it follows that, as the service of the order in supplementary proceedings, as well as the judgment recovered by the plaintiff, were first in point of time, the moneys in the hands of the receiver must be applied to the payment thereof as of right