Willis v. Sharp

Headnote

1. Receiver—Restitution or unauthorized raiments.

A receiver was appointed in this action and directed to pay the judg

ment out of defendant’s estate. Pending appeal from the order of re ceivership, other actions were brought by plaintiffs and others, the judgments in which extended the receivership and directed him, after reserving the amount of the judgment herein, to pay such judgments. The receiver did not reserve such amount, hut paid out all the fund on the subsequent judgments. The order herein having been reversed for error, Held, that such payment having been unauthorized the receiver should he required to restore to defendant the amount of the judgment with interest,

2. Same.

Plaintiffs, having instituted the proceeding, should be held liable for the expenses of the receivership and should he required to restore the amount received by them on their second judgment.

Appeal from order requiring the receiver herein to restore to defendant the amount of the judgment in this action with interest, and also requiring plaintiffs to restore the amount of the judgment recovered by them in a subsequent action to which the receivership was extended, with the costs of such receivership.

The following is the opinion at special term:

CuLLEisr, J.—-In suit No. 1, between these parties, Mr. Eitch was appointed receiver of the estate in the hands of the defendant, as executor, and out of such funds directed to pay the judgment previously recovered. From the order appointing such receiver and directing the transfer of the fund to him, the defendant appealed, and the order was reversed by the court of appeals. Pending the appeal the defendant complied with the order and transferred the fund to the receiver. During this period the plaintiffs instituted a second suit, and the creditors, Cutter et al., instituted a third suit against the defendant. By the judgments recovered in these two last-named actions the prior receivership was extended, and the receiver directed out of the funds in his hands after reserving the amount of the first judgment (then on appeal to the court of appeals), to pay the amount of such judgments. This application is that the plaintiffs in this action and the receiver restore to the defendant the whole fund so transferred. The answer made to the application is that the receiver has paid out the whole fund less his commissions, etc., on account of judgments in action No. 2, and in Cutter et al. v. Sharp, and that such judgments have not been appealed from, but remain in full force; while the order appointing the receiver was reversed, the court of appeals do not seem to have held it void. I shall assume, therefore, it was valid though erroneous. If this view be correct, the receiver, being an officer of the court, should not be liable personally where he has complied with the orders of the court but the defendant should look for restitution to the plaintiffs who have received the fund. But it appears here that the receiver instead of paying the judgment in Willis v. Sharp, No. 1, or retaining moneys sufficient for the purpose, paid out all the fund on account of judgment No. 2 and judgment in Cutter v. Sharp. As the plaintiffs’ attorney was the same in all these actions, I assume it was with the assent of the parties and it may be suspected that this was done to avoid the effect of an adverse decision on the appeal in this action, as no appeal was taken in No. 2, nor in Cutter v. Sharp. Nevertheless, this was not only unauthorized, hut in contravention of the terms of the orders and judgments of -this court and the defendant can

not be prejudiced thereby as it is not alleged that he assented to it. The receiver must, therefore, restore the amount of such judgments with interest from the time of the judgment and look for indemnity to the parties who induced this action.

The next question is as to the liability of the plaintiffs to make restitution. They instituted the proceeding but unless the receivership was void I think they should not be liable for the whole fund regardless whether they have had the benefit of it. They should be held liable for the expenses of the receivership, in my opinion, for the reason that they instituted the proceedings for the collection of their judgment and the case is analogous to the recovery of money paid to the sheriff on an execution on a judgment subsequently reversed, where it would seem that recovery can be had for the whole sum paid on the execution, which would include the sheriff’s fees. Kidd v. Curry, 29 Hun, 215 ; Sturges v. Allis, 10 Wend., 354 . In action Ho. 2 the judgment did not provide for a receiver of the estate, and the payment of the recovery by the receiver. That was directed by an order made subsequent to the judgment. The money had already been taken from the defendant by the order in this action. That order has been reversed. As it was the foundation of the proceeding by which the plaintiffs obtained the amount of the second judgment, I think on its reversal the title of plaintiffs to the moneys fails, and they should make restitution. The motion granted to the extent indicated, with ten dollars costs. As to the remainder of the sum paid over to the receiver, the defendant must proceed against Cutter et al.