Ryan v. Rand — 9 N.Y. St. Rep. 523

Majority

p. 523

Richard W. Ryan, App’lt, v. Thomas B. Rand, Resp’t.

(City Court of New York, General Term,

Filed May, 1887.)

Headnote

Personal liability of receivers and other representatives.

The rule is that a person employed by a trustee, receiver, general assignee, executor or administrator, in matters pertaining to the execution of the trust, must look to the person employing him individually for his compensation. Trustees and such like officials are individually liable because they have no responsible principal behind them for whom they may contract, and against whom the creditor may enforce his demand.

The defendant was appointed receiver of the Rossmore Hotel, in an action brought in the supreme court, by Huldah H. Clapp against Robert C. Clapp and others. The court afterwards ordered a reference to state the defendant’s accounts as receiver. Charles P. Crosby, as attorney for the defendant, represented him on the reference. The plaintiff is a stenographer, and as such took notes of the evidence offered before the referee. He transcribed his notes and furnished full copies of the evidence to the defendant’s attorney, who subsequently promised to pay the plaintiff’s bill amounting to $262.50. At the close of the plaintiff’s case, his complaint was dismissed upon the ground, that as the services were rendered to the defendant in his

p. 524

representative capacity as receiver, and not in a matter in. which he was individually concerned, the action should, have been brought against the defendant as receiver, and that he could not be held individually. From the judgment-entered on this direction the plaintiff appeals.

Phillips & Wray, for app’lt; Charles P. Crosby, for resp’t.

The trial judge erred in holding that, the defendant was not individually liable for the services-rendered upon his accounting as receiver. The rule is, that, a person employed by a trustee, receiver, general assignee, executor or administrator, in matters pertaining to the execution of the trust, must look to the person employing him individually for his compensation, as the contract does not-bind the estate he represents. The title to the trust property vests in these different officials, as owners for all the--purposes of the trust, and they must account for it to all the persons ultimately entitled to distribution. They are-individually liable because they have no responsible principal behind them for whom they may contract, and against-whom the creditor may enforce his demand. Davis v. Stover, 16 Abb. Pr. (N. S.), 225; Ferrin v. Myrick, 41 N. Y., 315 ; Mygatt v. Wilcox, 45 id., 306; Bowman v. Tallman, 2 Robt., 385; Wilcox v. Smith, 26 Barb., 316 ; Schmittler v. Simon, 101 N. Y., 554 ; Moran v. Risley, 1 City Ct. R., 229; Singer & G. Co. v. Hardy, 2 id., 223.

The defendant must pay the plaintiff’s bill and charge it. against the estate he represents, and, if found correct, it. will no doubt be allowed. It will not do for him to say that he has no estate to charge the account to, for then the. policy of the rule holding him individually liable in the first instance has stronger reasons for its support. The receiver, as a rule, cannot involve the estate in expense without the sanction of the court. Edwards on Rec’rs (Bingham’s ed.), 182, 200, 201, 220; High on Rec’rs, § 175; 1 Parsons on Cont. (7th ed.), 122.

There was no authority from the court making ne plaintiff’s demand a charge upon the estate, and the defendant has no power to make it a charge thereon except-by payment, then charging it in his accounts and having them sanctioned by the court in the usual way. The plaintiff evidently did not intend to render his services gratuitously, and must have a claim against some one. Mr. Crosby, who retained the plaintiff as the attorney and known agent of the defendant, was not personally liable for the bill, not having assumed its payment personally, and the remedy is against the defendant, for whose benefit; the work was done. Bonynge v. Field, 81 N. Y., 160 ;

p. 525

Same v. Waterbury, 12 Hun, 534 ; Sheridan v. Genet, 12 id., 660 .

In the People v. The Universal Life Ins. Co. ( 30 Hun, 142 ), it appeared that the receiver of an insolvent life insurance company, after his appointment, occupied and used premises theretofore occupied and used by the company, and the court (at page 143) said, “The liability sought to be enforced is for the receiver’s own tenancy; it is against him as assignee of the lease, and not for a debt owing by the company * * * The liability of the receiver appears to be the ordinary common law liability of the assignee of a lessee to the lessor.” This decision is iri keeping with the rule maintaining the individual liability of receivers for obligations voluntarily assumed. The plaintiff made out a prima facie case. Indeed the defendant (as far as the record discloses) found no fault with the plaintiff’s proofs, and based his motion for a non-suit on the ground of absence of individual liability on his part. If he intended to require the plaintiff to furnish more defi.nite proofs of employment, the defendant should have been more definite in stating the ground of his motion that the plaintiff might have supplied the proof. Devoe v. Brandt, 58 Barb., 493 ; Newton v. Harris, 6 N. Y., 345 ; Binsse v. Wood, 37 id., 526.

As the defendant was liable individually, the trial judge erred in holding he was not, and for this error the judgment must be reversed and a new trial ordered, with costs to the appellant to abide the event.

Hyatt and Ehlich, JJ., concur.