Merritt v. Scott — 10 N.Y. Sup. Ct. 657

Majority

p. 657

THERON MERRITT, Receiver of ROSWELL H. SAWYER, Respondent, v. WILLIAM SCOTT and JAMES A. HOYT, Appellants.

Headnote

Statute of limitations—Running of, not stopped as to one joint debtor by commencement of action against the other— Oode,% 99—Assignment for benefit of creditors — what interest acquired by receiver of assignor.

On the 31st of May, 1851, a judgment was recovered against the defendants herein, as surviving partners of a firm; in March, 1870, an action was commenced thereon against the defendant Scott alone; in June, 1871, an order was made, hy consent of Scott’s attorney, directing that the complaint be amended by inserting the name of Hoyt as a defendant; in June, 1872, Hoyt appeared and set up the statute of limitations. Held (1), that, as when the action was commenced, Hoyt was not named as a defendant therein, the running of the statute of limitations was not stopped as to him by the service of the summons and complaint on Scott; (2), that, as the order of June; 1871, was made without the consent of, or notice to, Hoyt, he was not thereby deprived of the defense which had already accrued under the statute.

Where a debtor has made an assignment of all his property for the benefit of creditors, and the assignee has died leaving the trust unexecuted, a receiver— appointed in a suit in which the assignor is the sole defendant — of all the property and assets of such assignor which have not been collected and distributed under the assignment, acquires no interest in the property assigned, except a possible reversion in any surplus which may remain after the payment of all the debts provided for therein.

Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee.

E. B. Crowell, for the appellants.

As the rights and interests of George W. Betts are immediately connected with and must necessarily be affected by the decision, the court cannot determine ' the controversy in this case without the presence of said George W. Betts or his personal representatives. (1 Daniell’s Ch. Pl. and Pr. [4th, Perkins’, ed.], 191, 200; Story’s Eq. Pl., §§ 72, 77, 170; Calvert on Parties, 3; Gray v. Schenck, 4 N. Y., 460 ; McLoughlin v. Van Keuren, 21 N. J. Eq., 379 ; Story on Conflict of Laws, 842; Sturtevant v. Brewer, 17 How. Pr., 571 ; affirmed, 4 Bosw., 628 ; Hallett v. Hallett, 2 Paige, 19; Wendell v. Van Rensselaer, 1 Johns. Ch., 350 ; Shaver, Receiver, etc., v. Brainard, 29 Barb.,

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25 ; Davis v. The Mayor, etc., 2 Duer, 663 ; State of New York v. Mayor of New York, 3 id., 121.)

Charles Jones, for the respondent.

This action is brought upon a judgment recovered by George W. Betts, against the defendants, as surviving partners of the firm of James A. Hoyt & Co. . The judgment was recovered in the Supreme Court, and duly entered, on the 31st day of May, 1851. In March, 1870, the plaintiff commenced an action on said judgment against the defendant William Scott, alone, describing the judgment in the complaint as having been recovered against both of the defendants, as survivors of the firm of James A. Hoyt & Co. The defendant Scott appeared and answered, and, amongst other things, alleged the recovery of the judgment against himself and Hoyt, jointly, as such surviving partners; that Hoyt was still living, and was a necessary party to the action. Afterward, and in June, 1871, an order was made at Special Term, on consent of the attorneys for Scott, directing that the complaint be amended by inserting the name of James A. Hoyt, as defendant, and making such other changes as the insertion of his name required. In June, 1872, Hoyt appeared in the action by Messrs. Ball & Beall, his attorneys, who demanded a copy of the complaint, etc., to be served on them. The amended complaint was served on such attorneys, in July following, to which Hoyt separately answered, and, amongst other things, alleged, as a further and separate defense, “ that the cause of action stated in the complaint did not accrue within twenty years next before the commencement of this action.” The judgment having been recovered on the 31st day of May, 1851, twenty years had not elapsed when the action was commenced' against Scott alone, in March, 1870. But, when Hoyt was made a party to the complaint by order of the court, in June, 1871, more than twenty years had expired since the recovery of the judgment. By section 70, of the Code of 1848 (now section 90), and section 74, of the Code of 1851, it is provided that an action upon a judgment can only be commenced within twenty years. After much judicial conflict, it is the settled law of this State as to joint debtors, that,

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in respect of the defense of the statute of limitations, each stands upon his own bottom;^[1] and it therefore does not follow that, because one of such debtors cannot interpose the statute as a defense, others may not. The answer of Hoyt in this case, setting up the statute of limitations, was a good plea unless the action is to be deemed commenced against him, under section 99 of the Code, before the expiration of the twenty years. That section provides, that “ an action is commenced as to each defendant when the summons is served on him, or on a co-defendant, who is a joint contractor, or otherwise united in interest with him.” Under this provision, if Hoyt had been joined as a defendant with Scott at the commencement of the action, the service on Scott would have taken the case out of the statute of limitations as to both. But Scott was sued alone. He then had no co-defendant to be affected by service on him, and although the cause of action was stated to be a joint one, in such form that Scott could plead the non-joinder of Hoyt in abatement, that fact does not answer the requirement of the Code. It was only because Hoyt was not a co-defendant, that Scott could plead in abatement; and it is not enough to show by the form of pleading, that another joint debtor ought to be joined in the suit, to constitute the latter so far a defendant that the suit can be deemed commenced against him within section 99 of the Code. The question, then, must depend upon the effect of the amendment of the complaint, ordered by the court in June, 18*71. That order was made by consent of the attorneys of Scott. Hoyt had no notice of the motion, nor did he appear and consent. It was made after the statute had run as to Hoyt. The eases above cited show that Scott had no authority, either by payment of part, or by express promise, or in any form, to revive the judgment as against his co-debtor. Nor do we think either he or his attorneys could, by consent or any other arrangement, so amend the proceedings that Hoyt would thereby be made a defendant by relation, as of the date when the action was commenced. What effect Hoyt’s

* Van Keuren v. Parmalee and others, 2 Comstock, 523; overruling Johnson v. Beardslee, 15 Johns., 3 , and Patterson v. Choate, 7 Wend., 441 ; Shoemaker v. Benedict, 1 Kernan, 176; Lewis v. Woodworth, 2 Comstock, 512; Denny v. Smith & Hull, 18 N. Y., 567 ; overruling Brown v. Delafield, 1 Denio, 445 ; Bogart v. Vermilya, 10 N. Y., 447 .

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voluntarily coming in and. consenting to such an amendment as was made, would have had, need not be discussed, for that question is not before us. The order of June 9, 1871, made Hoyt a formal party to the action as of that date, for all purposes necessary to obviate the plea in abatement for his non-joinder, and for such other purposes as might he essential to the prosecution of the action against Scott upon the alleged joint indebtedness. But it did not, and could not, deprive Hoyt of the defense already accrued under the statute. Had Hoyt been brought in as a party before the statute had run, the suit might be deemed commenced as of the time when he was made a party, and the service actually made upon his co-defendant would under the Code, have saved the running of the statute. He appeared, however, in the action more than a year after the amendment, and pleaded the statute of limitations as a defense. We think he was clearly entitled to the benefit of that plea, and the plaintiff having shown no .fact taking the case out of the statute as against him, he was entitled to judgment in his favor. As to him, therefore, the judgment must be reversed, and a new trial ordered, with costs to abide the event.

The findings and conclusions of the learned referee, in regard to the judgment, and that it was upon an assigned note, and was recovered by Betts in his own name for the benefit of the trust, seem to us correct, 'under the pleadings and evidence. We are not able to see how the plaintiff, as receiver of the assignor, Roswell H. Sawyer, acquired title to the judgment .in suit. It appears that Sawyer became insolvent in 1850, and made an assignment of his property to George W. Betts in trust for his creditors, making three classes; the first and second being preferred creditors, and the third his general creditors. Betts accepted the trust and proceeded in its execution so far as to pay off the preferred indebtedness to himself, and then with the assent of creditors of the next class, he appointed Mr. Sawyer an agent to collect the assets. Sawyer made collections and paid the second class of creditors ten per cent on their debts. Betts died, leaving the trust unexecuted. He left no will and no assets, and administration was not taken out upon his estate. The death of Betts revoked the agency of Sawyer. Sawyer had no title or legal interest in the property beyond the possible reversion of a surplus after the payment of all his debts

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and the complete execution of the trust. Nothing could be reached in a suit against him while the trust under the assignment remained in force but that possible contingent interest. The suit in which the plaintiff was appointed receiver on an ex parte application, was brought by Jacob S. Merritt against Roswell H. Sawyer. Neither the heirs of Betts nor any representative of him, were made parties. Although the order appoints the plaintiff receiver of "all the property, assets and effects, of every nature and kind, which have not been collected and converted into cash and distributed under an assignment made by the defendant Roswell H. Sawyer to George Betts in the year 1852, yet it is difficult to see how the receiver could acquire, under such order, any other legal title or interest in such property than Sawyer himself had. On the death of Betts, no title reverted to Sawyer. Probably, under the circumstances, a court of equity might have been invoked in a proper action to appoint a trustee to complete the unexecuted trusts of the assignment, but it does not appear that the proceeding in which the plaintiff was appointed, was of that nature, nor that his receivership was created for the purpose of executing such trusts. Possibly, on a new trial, something further may be shown to uphold the right of plaintiff to maintain the action. •

Daniels and Brady, JJ., concurred.

Judgment reversed, and new trial granted as to defendant Hoyt, costs to abide event.