Webb v. Osborne — 27 N.Y. St. Rep. 792

Majority

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James Webb et al., Pl’ffs, v. Thomas Osborne, Def't. William J. Simonton, Pl’ff, v. Thomas Osborne, Def’t.

(New York Common Pleas, General Term,

Filed December 2, 1889.)

Headnote

1. Supplementary proceedings — Receiver—When title to realty vests IN.

A receiver was appointed in the first action and duly qualified, but the order was not filed in the county clerk’s office for over a year thereafter.. The receivership was extended to the second action and the order of extension filed with the county clerk. Thereafter and before the first order-was so filed, the judgment debtor conveyed real estate. Field, that, under § 2468 of the Code, the real estate became vested in the receiver when the order of extension was filed, and that the subsequent deed conveyed nothing.

2. Same.

The rule that a plaintiff should exhaust his remedy by execution before-

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proceeding against real estate by means of a receiver, has no relevancy or force where the judgment debtor has consented to the order of appointment.

The appellant is a receiver, in supplementary proceedings, of the above named Thomas Osborne. He was originally appointed by order of this court made in the action first above entitled, and dated March 4, 1886. This order was filed with the clerk of this court the same day. On March 11, 1886, the appellant, as receiver, gave a receiver’s bond, as required by law, which was duly approved by a judge of this court and filed in the office of the clerk of this court. Said order of March 4, 1886, was not filed in the office of the clerk of the city and county of New York until May 6, 1887.

On August 19,1886, an order was duly made in supplementary proceedings founded upon the action second above entitled, extending the receivership of Mr. Fixman to said second action. Said order of August 19, 1886, was granted upon the written consent of the attorneys for the defendant and judgment debtor who appeared upon the application, and upon the same day was duly filed in the office of the clerk of this court, and upon the 3rd day of March, 1887, was duly filed in the office of the clerk of the city and county of New York. At the time of the granting of the original _ order in the first action appointing Mr. Fixman receiver, and at the time of the granting and filing in the office of the said county clerk of the order of August 19, 1886, in the second action, extending such receivership, the above-named Thomas Osborne was the owner of a piece of real estate known as the Osborne Apartment House. Between the date of the filing and recording in the county clerk’s office of said order extending the receivership and the date of the filing and recording in said office of said original order appointing the receiver, to wit, on or about April 20, 1887, said Thomas Osborne conveyed said real estate by deed to one John H. Taylor. On the 24th day of October, 1888, an order of this court was made and entered, entitled in both of said actions, directing “that each and every one of the tenants occupying apartments in the premises mentioned and described in the said petition, and known as the Osborne Apartment House * * * attorn to the said Ezekiel Fixman, as such receiver, and pay to him their rents for the apartments occupied by them respectively, as and when the same become due and payable.”

Subsequently, and on or about the 22d day of November, 1888, by order duly made and entered in this action and dated that day, the order last referred to was vacated; and from such last named order, vacating said order of October 24, 1888, this appeal is taken.

A. H. Stoiber and N. C. Moak, for app’lt; William, H. Hewson, for resp’t.

I have stated above all the facts which Seem to me have any material bearing upon the present contro

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versy. The respondent claims that because the original order appointing the receiver was not filed in the county clerk’s office until after the execution and delivery of the deed from the judgment debtor to John H. Taylor, the receivership of Mr. Fixman never applied to the real estate in question. But the order extending such receivership was duly filed in said county cleric’s office before the making of said deed, and, under the circumstances of this case, I think such filing was sufficient for all purposes of vesting the receiver with the legal title to the Osborne Apartment House. Section 2466 of the Code provides that when a receiver has already been appointed, the judge instead of appointing another receiver must make an order extending the receivership. There is no doubt but that Mr. Fixman was legally ■iappointed in the first suit. The original order appointing him was duly made, and, together with his bond, filed in the office of the clerk of this court. In my judgment this constitutes a valid appointment, within the meaning of § 2466, regardless of the fact whether or not the receiver completely qualified in the first suit by filing such original order in the county clerk’s office. The section then proceeds: “ Such an order gives to the judgment creditor the same rights as if a receiver was then appointed upon his application.”

The following section directs that an order appointing the receiver or extending the receivership shall be filed in the county ■clerk’s office. As far as the form of this language indicates anything, the intention would seem to be that an order of original appointment, and one extending a receivership, were of co-ordinate authority and that the filing of either of such orders would accomplish the result of a legal qualification on the receiver’s part. This theory of construction is strengthened by the similar language of § 2468, which provides that the title of the judgment debtor’s property shall vest in the receiver from the time of the filing of an original order of appointment, or an order •extending the receivership. There is no express language requiring the original order to be filed with the county clerk before the order extending the receivership shall become valid. On the contrary, the purpose appears, by clear implication, from all the sections referred to, to make the filing of such order of extension in all essential respects an equivalent to the filing of the original order, and not a mere concomitant thereof. My conclusion is that, under § 2468, the real property of the judgment debtor became vested in the receiver on the 3rd day of March, 1887, when the order extending the receivership was filed in the county clerk’s office, and that the subsequent deed by the judgment debtor conveyed nothing.

It follows that the order directing the tenants to attorn and pay rent to the receiver was properly granted under rule 78.

The point has been made on behalf of the respondent that the granting of such order was error, because when a judgment debtor is seized of real estate the proper course for the creditor to pursue is to issue execution against and sell the same, and not to ■ seek to collect his judgment out of the rents through a receiver.

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The cases of the First Nat'l B’k of Canandaigua v. Martin, 49 Hun, 571 ; 18 N.Y. State Rep., 414, and Bunn v. Daly, 24 Hun, 526 , are cited in support of this contention. But in both of these cases the application before the court was to appoint a receiver, and not to ■extend aid to a receiver already appointed. The grounds for the principle laid down in such authorities are stated in the First National Bank v. Martin, supra, as follows: “If the plaintiff should be permitted to procure the appointment of a receiver, and thus vest the title of the real estate of the judgment debtor in such receiver, it could be sold, and the judgment debtor deprived of the right of redemption which is given him in case of a sale by execution. It was the duty, therefore, of the plaintiff to have caused the house and lot to be sold on execution, thus exhausting its remedy by execution before resorting to these proceedings.”

It thus appears that the reason for the rule that plaintiff shall exhaust his remedy by execution before proceeding against the property by means of a receiver is that if the other course were adopted a judgment debtor’s right to a redemption might be taken away. Such rule, therefore, exists for the judgment debtor’s benefit and to protect his strictly legal rights. It can have no relevancy or force in the case at bar', because here it expressly appears that the order extending the receivership was formally consented to on the judgment debtor’s part.

The order appealed from should be reversed, with costs.

Van Hoesen, J., concurs.