In re the Voluntary Dissolution of The West Side Electric Light & Power Co.

Majority

p. 799

In the Matter of the Voluntary Dissolution of The West Side Electric Light & Power Co.

(Supreme Court, General Term, First Department,

Filed December 29, 1890.)

Headnote

Mechanic’s lien—Priority between lienors and execution creditors, or corporation.

Respondents sold to the corporation a portion of its plant, and filed a mechanic’s lien for the purchase price. The appellants thereafter obtained judgment against the corporation, and issued execution. A receiver of the corporation was appointed in this proceeding for dissolution, but the sheriff was permitted by the court to levy and sell under the execution. the proceeds to be retained until further order. At the sale the respondents gave notice of their lien, and the sale made was of the right, title and interest of the corporation at the date of the judgment. Held, that the sale having been made subject to respondents' lien, they were not entitled to any part of the proceeds, and the same should be paid to the judgment creditors.

Appeal from an order denying an application directing the sheriff to pay over to Hunter & Willis a certain fund in his hands.

Archibald G. Shenstone, for app’lts; Robert S. Rudd, for resp’ts-

The West Side Electric Light & Power Company was organized, as its name implies, for supplying electric light and power. The company leased from its president, Elsworth L." .Striker, a lot on West Fifty-third street, in New York city, and erected thereon a substantial brick building to receive its plant, viz.: engines, boilers, dynamos, etc. A large part of the plant was purchased through the firm of Charles R. Vincent & Co. (the respondents herein), the value thereof being over $7,000. The bill of said Vincent & Co. was not paid when the same became due, viz., about April 1, 1889, and upon the 29th of that month said Vincent & Co. filed a mechanic’s lien upon the said premises and plant.

Upon June 8, 1889, the appellants obtained a judgment in the city court for $1,359.05 against the West Side Electric Light & Power Co., issued execution thereon and' delivered the same to the sheriff. The sheriff made no levy thereunder until on or after June 10th (the 9th being Sunday), and upon that day Francis D. Dowley was appointed receiver of the assets of the said corporation. The appellants obtained an order permitting the sheriff to levy on sufficient property to satisfy the appellant’s judgment, but staying any sale thereunder. The sheriff made such levy upon “2 boilers, 2 engines and 1 dynamo,” the boilers and engines being those furnished for the plant by respondents herein, and all the property so levied upon being part of. the realty. Various attempts were made by the appellants to obtain permission from the court to proceed - to the sale of the property levied upon, but it was not until January 22,1890, that an order was obtained permitting said sale. Thereupon respondents obtained an order to show cause why the order permitting the sale should not be vacated, and setting up the claims of Vincent & Co. (these respondents) to a lien on the premises and on the very chattels which the sheriff was authorized to sell. It is to be noted that this was the first time Vincent & Co.’s claim was presented in court.

As a result of the hearing, an order was made by Mr.'Justice O’Brien, February 5, 1890, which permitted the sheriff to sell, but directed him to retain the proceeds until the further order of this court.

Prior to the sale, at the place and time advertised for it to be made, the sheriff was notified, ,in the presence of those there assembled, that Charles R. Vincent & Co. claimed to have a lien upon the property which existed prior to the sheriff’s levy, the result o£ which was that the sale was only of all the right, title and interest of The West Side Electric Light & Power Company which they had on the 8th of June, 1889, or at any time thereafter, in and to two boilers, two engines and one dynamo, that being the property levied upon and sold. It is contended on the part of the appellants that the asserted' lien was not a valid' one and gave the lienors no prior claim; but whether it was or not it is not necessary for the purposes of this appeal to decide. On the subject, however, see Watts-Campbell Co. v. Yuengling, 51 Hun, 302 ; 21 N. Y. State Rep., 186; McAdam on Landlord and Tenant, § 119, and cases cited. It is not considered necessary to de

p. 801

cide the question, as suggested, for the reason that the sale of the articles sold was made subject to the lien of Charles R. Vincent & Co., whatever it might be, as announced at the time of the sale and is protected by the character of the sale made by the sheriff, namely, of all the right, title and interest of the West Side Electric Light & Power Company, which they had on the 8th of June, 1889, or at any time thereafter, in and to two boilers, two engines and one dynamo, the property levied upon as already stated. The purchaser consequently took the property subject to the lien of which he was advised, which still attaches to the property, and which if valid can be enforced against it, notwithstanding" its delivery to the purchaser.

• Under these circumstances the motion should have been granted.

The West Side Electric Light & Power Company having an interest in the surplus over and above the lien, assuming that claim to be valid, it was a leviable interest and could be sold as it was.

For these reasons the order appealed from should be reversed, and the motion granted, with ten dollars costs and the disbursements of this appeal.

The statement that the sale was of no more than the right, title and interest of the judgment debtor in the property sold under the execution, has not been denied or questioned. It is to be acted upon, therefore, as an established fact. And from that fact it follows that the persons claiming liens upon the property sold have no right to or interest in the money produced by the sale. That money belongs to the judgment creditors and should he paid over to them. The order should, therefore, be reversed, and an order entered directing that payment to be made, with costs and the disbursements on the appeal

Van Brunt, P. J., concurs.