Stein v. Levy — 36 N.Y. St. Rep. 533

Majority

p. 533

Herman Stein et al., App’lts, v. Charles F. Levy, Impl’d, Resp’t.

(Supreme Court, General Term, First Department,

Filed January 16, 1891.)

Headnote

Injunction—Reference to ascertain damages.

An injunction was procured by attaching creditors to restrain the sheriff from selling property of the attachment debtor under an execution against him, and the other defendants from receiving or collecting any of his goods or chattels, which injunction was afterwards set aside. Held, that an order of reference to ascertain the damages sustained by the judgment creditor, made without notice to the judgment debtor and sheriff, was irregular; and that the failure of plaintiffs to raise the objection on the hearing did not rectify the proceeding, as the right to raise it is not restricted to them, but inheres in the other persons who were in no way represented by them.

Appeal from an order directing a referee to ascertain and report the damages sustained by the respondent by reason of an injunction issued in this action.

Benno Loewy, for app’lts; Fromme Bros., for resp’t.

The injunction order restrained the sheriff from selling property levied upon under an execution issued to him in favor of the respondent, against the defendant, Julius A. Levy, and from paying over any of the proceeds thereof realized by him, and also restrained the other two' defendants, from collecting or receiving any of the goods, assets, or choses in action of the defendant, Julius A. Levy.

It was issued at the instance of the plaintiffs as attaching creditors of the last named defendant. And this court, on an appeal from an order denying the application to vacate it, reversed that order, and set aside the injunction.

A motion was thereupon made, on behalf of the defendant Charles F. Levy, who was the plaintiff in the action in which the .execution had been issued, for the order from which the appeal has been taken.

It is entirely apparent from the papers used on the motion that it was made solely for the benefit of Charles F. Levy, and in no sense to include or for' the benefit of the sheriff or of the defendant, Julius A. Levy, and neither of these persons had any notice of the motion, although the undertaking given to obtain the injunction was for their indemnity as well as that of the respondent^ Charles °F; Levy. This was an irregular proceeding, which, by its completion, might deprive the other two defendants of all right to indemnity by means of the undertaking, or subject the sureties to other demands, which it is the policy of the law to prevent.

The fact that the other defendants in the action may not have equal claims to protection with the moving party, or may present no claim whatever, will not relieve the proceeding from the effect of this objection. For without first giving them an opportunity to be heard in their own behalf, it cannot appear that they are not entitled, for any cause, to be represented in the hearing intended to be secured. It is for them to conclude for themselves whether

p. 534

they will claim indemnity under the undertaking. And where the proceeding is animated by an adverse view, as this is, notice of it should be first given to them, enabling them to take such steps as may be requisite for their own protection. It is the only mode by which adverse or contesting claims can regularly be determined. And that has not been followed in this case.

The failure of the plaintiffs to raise this objection on the hearing of the motion does not rectify the proceeding. For the right to raise it is not restricted to them. It is the right inhering in these two other persons, in no way represented by the plaintiffs, which it is the duty of .the court to preserve. And the plaintiffs had no such relation tb them as permitted them, if they had been so disposed, to surrender it

This order being irregular should be reversed, with ten dollars costs and the disbursements on the appeal, and the motion denied, but with liberty to renew it on service of corrected papers on the other parties interested in the proceedings.

Yah Brunt, P. J., and Beady, J., concur.