O'Mahony v. Belmont — 37 N.Y. Super. Ct. 380

Majority

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JOHN O’MAHONY v AUGUST BELMONT AND ERNEST B. LUCKE. Thomas J. Barr, Receiver, appellant, and Ernest B. Lucke, respondent.

Headnote

I. Bbceivbbs.

1. Two or more over the same property.

1. When a receiver has been appointed by one court and has obtained possession of the property or fund over which he was appointed, he cannot be' in any manner interfered with by a receiver subsequently appointed, or by any proceeding whatever had, in any other action brought in any other court.

2. The court that first appoints a receiver has the sole disposition of the fund or property received by him as such, and is bound in the exercise of its judicial powers to make administration thereof, either by restoring it to the party from whom it was taken, or by delivery to the party who in the regular course of litigation in its own court, and in the action in which the receiver was appointed, should be adjudged to be entitled to it.

3. A subsequent order of receivership made ex parte, cannot prevent a determination in the first action of the rights, of the receiver therein appointed and the parties thereto, in the fund or property obtained by the receiver under the order of receivership therein.

2. Obtruding into office of receiver.

1. When one obtrudes himself in an action, and has himself pro- , cured his appointment as receiver, despite and contrary to the wishes and desires of the parties to the litigation, he is bound

to restore the fund received by him under the order intact, and cannot relieve himself from this liability by showing that he deposited it in a safe and proper savings bank which had subsequently become insolvent.

Before Van Yobst and Speib, JJ.

Decided May 2, 1874.

Appeal from order directing receiver to pay moneys.

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Thomas J. Barr was appointed receiver in the above entitled action (for the order of receivership, and the nature of the action, see ante, p. 223). As such receiver, he instituted proceedings against the defendant Lucke, as for a contempt in not paying over certain moneys of which he claimed to be receiver, the result of which was that defendant Lucke paid over the money. This action was dismissed on being called for trial, no one appearing for the plaintiff.

The judgment entered on such dismissal contained no disposition of the fund in the receiver’s hands.

Thereafter, the defendant Lucke instituted proceedings for an accounting by the receiver. And on such accounting, an order was made adjudging that the receiver be charged in favor of defendant Lucke, with twenty-seven thousand six hundred and nintey-five dollars and nine cents, and credited with three thousand sixty-seven dollars and seventy-eight cents, and that he also be charged with the referee’s fees on the accounting.

On this proceeding, the court held that Mr. Barr had improperly obtruded in this action, and had himself procured his appointment, despite of and contrary to the wishes and desires of the parties to the litigation. (From the order made in the accounting, the receiver appealed, and the order was affirmed ; see ante, p. 223).

After the above order on the accounting had been made, defendant Lucke applied for an order that Mr. Barr should pay over to him the difference'between the amounts with which he was charged, and that with which he was credited, and also the amount of. said referee’s fees.

In opposition to this motion, Mr. Barr showed that Thomas 1ST. Dwyer,' having obtained a judgment against said O’ Mahony, and execution thereon having been returned unsatisfied, commenced in the supreme court a

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judgment creditor’s action against Mm, August Belmont and Ernest B. Lucke, alleging in the complaint (among other things) that said O’Mahony had a large sum of money to wit, fifteen thousand dollars and over, to his credit in the hands of said Belmont & Go., and that said O’Mahony had commenced an action in his own name against said Belmont & Co. in this court for the recovery of the money, and praying (among other relief) for an injunction and a receiver; that in this action in the supreme court, that court made an order, ex parte so far as Belmont and Lucke were concerned, appointing him, and Mr. Barr, as receiver, that he duly qualified as receiver thereunder; that said order of the supreme court was as follows : ■

CAPTION.

Special Term at Chambers, June 1, 1870.

Present, Albert Caedozo, Justice.

[ Title of Court and Parties. ]

“ On reading and filing the summons and complaint in this action, and the affidavit of the plaintiff, and after hearing Mr. William A. Boyd for the plaintiff, and in support of the motion, and Mr. Stephen D. Stephens, Jr., for. the defendant, John O’Mahony : “Now, bn motion of the said William A. Boyd, attorney for the plaintiff,

“It is ordered, that the defendants, John O’Mahony, August Belmont and Ernest B. Lucke, their and each of their agents, attorneys and servants, be and they are hereby firmly enjoined and restrained from paying over, taking, disposing of, or in any way parting with the money now in the control of, or now pr lately on deposit, to the credit of the said O’Mahony, in the hands of August Belmont and Ernest B. Lucke, composing the house of August Belmont & Co., in the city of New York; and if the said parties, or either of them, voluntarily or involuntarily parted with the

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actual custody of the said money prior to the making of this order of injunction, then that they and neither of them shall in any manner consent or connive that the said money, or any part thereof, be, whether by action at law or in equity, or any legal or other proceeding, diverted from being applied to the payment of the judgment procured, and which may be procured in the above entitled action; and that they and each of them do absolutely desist and refrain from doing and allowing, or permitting to be done or to occur any act, omission or default, by which the said sum of money, or any part thereof, may be diverted, lost, incumbered, or in any manner impaired, so as to deféat- or lessen its appropriation to the judgment recovered by the plaintiff, or which may be recovered by him in this action.

“And it is further ordered and decreed, that Mr. Thomas J. Barr, of the city of New York, be and he is hereby appointed the receiver of the said fund so deposited, or lately on deposit in the hands of the said defendants, August Belmont and Ernest B. Lucke, being the firm of said Belmont & Co., to the credit of the said defendant, John O’Mahony; that is to say, the sum of fifteen thousand dollars and upwards, with the power and authority of receivers in such cases.

“ And it is further ordered, that the said receiver give the requisite security as such receiver, which shall be his bond, in the penal sum of two hundred and fifty dollars, with surety, to be approved by a justice of this court; and all other questions are hereby reserved.”

Mr. Barr also introduced, in opposition to the motion, proof to the effect that the money paid to him as •receiver in this action, by defendant Lucke, was the money of Belmont, and that it was paid by him as Belmont’s agent.

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He also showed, in opposition, that he deposited the money received from Luche in a savings hank, which at the time of such deposit was solvent, but had since failed, and was then in the hands of a receiver, who had declared a dividend of twenty-five per cent, and no more; that at the time of such deposit he had, and continued to have, and at its failure still had on deposit in said bank a large amount of his individual money; that he had no knowledge, information, intimation, suspicion, or reason to suspect that said bank was in an embarrassed condition, or about to fail, in time to enable him to withdraw the deposits made as aforesaid before its failure; that in fact he had no intimation, suspicion, or reason to suspect that said bank was in an embarrassed condition, or about to fail, until after its failure had taken place.

Mr. Barr also claimed that the order of receivership in the supreme court covered the money received by him from Lucke.

On the hearing of the motion, counsel for the receiver insisted:

First. That the receiver should not be compelled to pay over the money, because he then held it as receiver in the said case in the supreme court.

Second. That at all events' he should only be required to pay from time to time such dividends as he might receive from said savings bank.

The motion was granted, and from the.order entered thereon the receiver appeals.

James Henderson, attorney, and S. Jones, of counsel, for appellant, urged the above points made at special term.

Bowdoin, Larocque and Macfarland, attorneys, and W. W. Macfarland, of counsel, for respondent.

This is an appeal from

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an order, made at the special term, requiring that' the receiver, Thomas J. Barr, pay over the money received by him in this action to the defendant Luche.

This court has already decided, both at the special and general terms, that this receiver should account to the defendant Luche, who alone was served, and appeared in this action,' for the sum paid by him to the receiver, with interest.

There are only two objections urged by the counsel for the appellant, on this appeal, against the order made below. One ■ is that the receiver should not be compelled to pay over the money in question to Luche because he now holds it, as receiver, in the case in the supreme court, of Dwyer v. O’Mahony, Belmont apd Luche.

It is hot necessary to inquire how, or by what proceedings the receiver got possession of the fund in this action. This court has decided that the order appointing Mr. Barr receiver was unauthorized and illegal, and was a trespass on the rights of property. He has now the possession of this fund thus acquired. Is the objection raised any sufficient reason why he should not pay it over ? I thinh not. At the time the order in the Dwyer suit, in the supreme court, was made, the funds were in the possession of Mr. Barr, as receiver in this court, in this action. This court, having jurisdiction of this fund, and over the officer holding it, could not be interfered with, in any manner, by any proceedings in any other action, brought in any other court. It had the sole disposition of the fund, and was bound, in the exercise of its judicial powers, to make administration thereof by-restoring it to the party from whom it' was taken, or by delivery to the party who, in the regular course of .litigation, in its own court, and in this action, should be adjudged to be entitled to it (Williams v. Benedict, 8 How. [ U. S.] 107).

Barr had given a bond for the performance of his

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duty, and would be liable to an action if he disposed of the fund without the authority of the court from which he received his appointment,1 and to which he was accountable.

But assuming that the supreme court had the right to take possession of this fund, the proceedings had before it could have uo binding force on these defendants, Belmont and Lucke. The order there made was without notice to these defendants. Had such an order been made in this suit, it would be no answer to an application, by either of them, for a judicial determination of their rights as to their interest in this money.

Again, the order in the supreme court appointed Mr. Barr “the receiver of the said fund so lately deposited, or lately on deposit, in the hands of the said defendants, Belmont and Lucke, to the credit of the said defendant, John O’Mahony.” This court has decided “that the money paid to the receiver was the money of Belmont & Co., and came directly from their funds,” and that no such money as is claimed by the order was ever deposited with Belmont & Co. to the order of O’Mahony. It is, therefore, quite clear, from a cursory reading of the order entered in the Dwyer suit, that the fund sought to be transferred to the receiver thereby was not the same fund which came to his hands through Mr. Lucke. Even had the court, or the parties procuring the order, intended to reach these moneys, the fact still remains—their purpose was not accomplished.

The remaining question, whether the receiver should pay over to the defendant, or his attorneys, the sums specified in the order appealed from, or ■ should be entitled to the deductions claimed by his counsel, requires but little consideration. It has been already adjudged that it was the duty of the receiver to make ' restitution without deduction of any sum. He was not a stranger to the proceedings which culminated in the

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transfer of these funds to him, or in the extraordinary proceedings which led to his appointment. In the words of the decision of Judge Vax Vorst, “The receiver has voluntarily placed himself in the position he now occupies.” He should not, therefore, complain of the legal consequences resulting from that position.

The order appealed from is affirmed, with costs.