p. 32Thomas Youngs, Jr., Appl’t, v. Marie C. Klunder. William S. Allen, Resp’t., v. Marie C. Klunder.(City Court of New York, General Term,Headnote
SUFPLBMENTABY PBOCEEDINGS—jPBIOBITY OF PAYMENT FBOM FUND IN BECEIVEB’S HANDS.While proceedings under Y’s judgment were pending defendant voluntarily submitted to an examination under a subsequent judgment in favor of A. and a receiver was appointed. The receivership was extended to the Y. judgment. Held, that such extension made the receiver’s title relate back to the time when the order on that judgmentwas served and that Y. was entitled to priority of payment from the fund in the hands of the receiver.
Appeal by Thomas Youngs, Jr., a judgment creditor of the defendant, from an order made at special term, denying a motion made by him for priority of payment of his judgment from funds in the hands of the receiver appointed of the defendant’s property in proceedings supplementary to execution founded on a subsequent judgment recovered by one Allen.
W. MacFarlane, for judgment creditor Youngs, appl’t; Ingraham & Allen, for receiver and for W. S. Allen, subsequent judgment creditor.
The appellant Thomas Youngs, Jr., recovered judgment against the defendant June 22, 1889, for $1,025. On August 30, 1889, an order was made thereon for the defendant’s examination as a judgment debtor. The order was returnable September 10, 1889, and was personally served upon her September 6, 1889.
On September 10, 1889, the defendant was examined under said order, and on her examination it then appeared that one Allen had recovered a subsequent judgment against her, and that on September 9, 1889, she had voluntarily submitted to an examination as a debtor under Allen’s judgment (no order for examination having been served), and that a receiver had been appointed, in the Allen suit, on the application of his attorney, immediately upon the close of her examination. The receivership was thereupon extended to the Youngs judgment. Youngs thereupon applied to have the Allen judgment subordinated to his, that his
p. 33priority oí judgment, of proceeding and of right might be preserved unimpaired by the subsequent proceeding had on the Allen judgment before referred to. The application was denied. This was error. Code § 2469;
Guggenheimer v. Stevens, 26 N. Y. State Rep., 245 ;
Bevans v. Pierce, 1 City Ct., 260; Throop’snote to § 2469 of his Ed. of the Code; Riddle & Bullard on Supp. Pro., 427, 431. The extension of the receivership made the title of the receiver relate back to the time when the order on the Youngs judgment was served for the benefit of the creditor in that proceeding. Code, § 2469. The fund in the hands of the receiver is not there for the benefit of Mr. Allen, or any particular judgment creditor. It is in
custodia legis for those creditors who establish a right to it, according to the respective priorities of their judgments, and these in respect to personalty are determined by the dates when the respective proceedings were commenced. To hold otherwise would lead to collusive preferences by judgment debtors and the appointment of friendly receivers to suit their convenience and further their interests. The judgment creditor, Youngs, was in everything but the appointment of the receiver prior in time, and is legally and equitably prior in right. Technically speaking, no receiver should have been appointed without notice to Youngs, Code, § 2465, one object of which Code requirement is to prevent collusive applications. Upon the entire record, it is evident that Youngs was prosecuting his proceeding with diligence, and that his efforts should not be superseded by a proceeding founded on a subsequent judgment.
It follows that the order appealed from must be reversed, with costs, and the application made below granted.
McG-own ana Holme, JJ., concur.