Majority
p. 33FRANCIS W. HOLBROOK, Receiver, &c., Plaintiff and Appellant, v. SOLOMON ORGLER, impleaded with HERMAN AHRENDORFF, Defendant and Respondent. Before Curtis and Sedgwick,- JJ. Decided August 3, 1875. Before Monell, Ch. J.
Headnote
Head-Note to Decisionop
General Term.
I. SUPPLEMENTARY PROCEEDINGS-CODE, §§ 394-398.
1. Receiver, no power to appoint.
a. In proceedings instituted under § 394 of the Code, after issue, but before return of execution, this court has no power to appoint a receiver.[1]
1. § 398 does not give power in such a case.
Head Note to Decision,
Special Term.
7. SUPPLEMENTARY PROCEEDINGS.
1. Mariné court—power op.
1. The marine court and its judge, have, in respect to judgments recovered in that court, all the powers and authority enumerated in and conferred by chapter 3, title 9, part 3 of the Code (supplementary proceedings), f
a. Transcript, filing of—This does not divest or affect such powers and authority,[2]
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Appeal from a judgment dismissing the complaint.
On July 21, 1874, John Pullman and Samuel C. Pullman recovered in the marine court of the city of Mew York, a judgment in their favor against said Herman Ahrensdorf for the sum of two hundred and eighteen dollars and thirty-two cents, and filed and docketed a transcript of said judgment in the office of the clerk of the city and county of Mew York, where said Ahrensdorf then resided, and issued an execution against the property of said Ahrensdorf to the sheriff of the city and county of Mew York, where said Ahrensdorf then resided, directing him to levy and collect the amount of said judgment, with interest from July 21, 1874, beside his fees.
Before the return of this execution, one of the justices of the marine court made an order dated July 31, 1874, in proceedings supplementary to execution, pursuant to § 294 and § 298 of the Code of Procedure, whereby the plaintiff was appointed receiver of all the property, debts, equitable interests, rights, and dioses in action of said Herman Ahrensdorf. The execution which had been issued was not returned until September 17, 1874. The plaintiff herein brought this action as such receiver.
Issue was joined by answer of defendant Orgler to the complaint, and was tried before a single judge at special term.
On the trial, defendant Orgler, among other things, claimed that plaintiff could not sustain his action because (1) the marine court had no power to appoint a receiver ; (2) plaintiff’s appointment as receiver under § 294, the execution not having been returned, and the judgment debtor being no party to it, was invalid.
The court at special term dismissed the complaint on the second ground, holding the first to be untenable.
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The following opinion was delivered :
Mokell, Ch. J.—“ The power of a justice of the marine court to make an order for the examination of a judgment debtor, and in that proceeding to appoint a receiver of the debtor’s property, must depend upon the construction and force to be given to the 7th section of the act of 1874, entitled ‘ An act in relation to the marine court of the city of New York’ (Laws, 1874, chap. 545).
“Previous to the passing of that statute, there was no such power.
“ The section referred to provides that, 1 In all cases where judgments shall be recovered in said court, all proceedings supplementary to execution on said judgments, under- the provisions of the Code, if had in the city of New York, shall be had and completed in the= said marine court, in the same manner and with like effect, in every particular, as now allowed by law in other courts of record, and all provisions of law relating to such proceedings shall apply to said marine court as fully as they now apply to any other court of record.’
“Under that statute the marine court may entertain these supplementary proceedings, unless deprived of jurisdiction by the effect of filing a transcript of the judgment in the county clerk’s office.
“The 68th section of the Code, which was made applicable to the marine court, provided that, upon filing a transcript with the clerk of the county, the judgment shall be ‘ enforced in the same manner, and be deemed a judgment of the court of common pleas.’
“ That section was also made applicable to justices’ and other inferior courts of cities, not of record.
“The marine court at that time was not a court of record, except for certain purposes (Huff v. Knapp, 5 N. Y. 65 ; Porter v. Bronson, 29 How. Pr. 292 ), but
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by the act of 1872 (Laws, 1872, chap. 629), it is declared to be a court of record for all purposes. That act also provides that the judgments of the court docketed with the county clerk, shall have the same effect as a lien, and be enforced in the same manner as the judgments of the court of. common pleas. It will be seen that the words, ‘ and be deemed a judgment of the court of common pleas,’ are omitted : and the repealing clause of ‘ all acts and parts of acts inconsistent with this act,’ is an express repeal of the 68th section of the Code as respects the marine court.
“The act of 1874is still broader. Section 12 provides that the judgments of the court may be docketed with the county clerk, and shall thereupon have the same effect as a lien, ‘and be enforced in the said manner as any other judgment of said court,’ thus changing it from ‘the same manner as judgments of the court of common pleas,’ and leaving it with the marine court to execute its own judgments in all cases.
“ This change in the statute was not noticed in matter of Lippman (Daily Register, January 13, 1875), nor was it necessary that it should be, as the judgment in that case had not been docketed with the county clerk.
“It is quite clear, therefore, I think, that under the last statute, the marine court is given power to execute Its own judgments in the same manner that other courts of record may do ; and whether docketed with the county clerk or otherwise, an execution may issue from such court, and no longer need be issued, as is understood to have been the former practice, out of the court of common pleas.
“ The Code regulating proceedings supplementary to an execution, has been held to apply to justices’ judgments which had been docketed in the county clerk’s office, which covered the judgments of the marine court which had been docketed in like manner; and
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the officer authorized to make the order was a judge of the court of common pleas. When the section of the Code was enacted, and down to the act of 1874, the marine court judgments, after docket in the county clerk’s office, were in effect judgments of the common pleas, and the judges of that court had exclusive jurisdiction.
‘ ‘ But as it was competent for the legislature to relieve the marine court from the operation of the 68th section of the Code, and give it control over its judgments, in respect to the manner of executing and enforcing them, it was equally competent to extend its jurisdicdiction to these supplementary proceedings.
“This has been done, and the marine court, under the act of 1874, is given the same power over its judgments and the manner of executing them, as is possessed by other courts of record ; and the only effect of docketing in the county clerk’s office is to make the judgment a lien on real property, as provided in section 282 of the Code in respect to the judgments of other courts.
“Another objection is, that the court can not appoint a receiver until after the return of the execution unsatisfied.
“The 294tli section allows the examination of a third person alleged to have property of the debtor, before the return of the execution ; and the authority to appoint a receiver is given by the 298th section. The 299th section provides that if the per-son examined claims an interest in the property adverse to the judgment debtor, such interest shall be recoverable only in an action against such person by the receiver.
“Thereare several decisions affecting this question.
“In Kemp v. Harding ( 4 How. Pr. 178 ) the appointment of receiver was made upon an examination under section 294, but without notice to the debtor, who appealed from the order, and the general term of the fifth
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judicial district held, that to authorize the appointment of a receiver in section 298 of the Oode, the proceedings should be against the debtor to reach his property generally, and not, under the 294th section, of third persons as to property of the debtor in their hands, and that without such personal proceeding against a debtor, a receiver could not be appointed. That case has been approved in Baker v. Johnson ( 4 Abb. 437 ), where it was held that a receiver, appointed without an order for the examination of the judgment debtor, could have no authority to sue. And in Sherwood v. Buffalo, &c. R. R. Co. ( 12 How. Pr. 136 ), it is said, the proceeding under section ' 294 is merely in aid of the principal proceeding against the judgment debtor, and must be had in connection with it, and can not be resorted to independently of any proceeding against the debtor.
“In Darrow v. Lee ( 16 Abb. Pr. 215 ) it was held by the general term of the common pleas, that until the return unsatisfied of an execution, a receiver can in no case be appointed.
“In Andrews v. Gienville Woollen Co. (11 Abb. N. S. 78) it is held that ‘ section 294 does not authorize the appointment of a receiver, and that a receiver can not be appointed under section 298 of a particular debt or particular article of the debtor’s property.’
“These are sufficient to show the current of decision setting strongly against the power to appoint a receiver, except upon an order for the examination of the judgment debtor; and I think they are sufficiently uniform to serve as a safe guide in determining the objection to the plaintiff’s right to sue in this case.
“The proceeding supplementary to the execution is similar to, if not a substitute for, the late creditor’s bill, which could not be filed until all legal efforts to collect the judgment had been exhausted. Hence, in all cases it was necessary to show that an execution
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upon the judgment had been issued and returned unsatisfied.
l£ So here, the remedies at law must be exhausted against the debtor’s property, and then he may be proceeded against to make discovery of his property, and the other proceeding is merely ancillary to such principal proceeding.
££íhe want of power in the judge to appoint a receiver, upon an examination under section 294, is vital to the plaintiff’s right to sue, and the objection is available by the defendant in this action.
££ The defendant must have judgment, dismissing the complaint, with costs.”
Judgment dismissing the complaint having been rendered, defendant Orgler appeals.
J. S. & C. H. Smith, attorneys, and of counsel for appellant.
D, & T. McMahon, attorneys, and Dennis McMahon, of counsel, for respondent.
The proposition contended for by the appellants is substantially this, that after issuing and before the return of an execution upon an affidavit that any person has property of the judgment debtor or is indebted to him in an amount exceeding ten dollars, a judge may appoint a receiver of all the property, debts, equitable interests, rights and choses in action of the judgment debtor, with all the powers of a receiver to take possession, hold and dispose of the same, precisely as though appointed under a creditor’s bill, or in proceedings supplementary to execution after the return of an execution unsatisfied.
It might be harsh and oppressive, while, an execution is in the sheriff’s hands that will be satisfied by a levy and sale, or by the efforts of the
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judgment debtor to meet it, that without waiting for the return of the process and simply upon the affidavit above referred to, a receiver with such powers should be appointed, and competent among other acts to subject the property of the judgment debtor to the burden and expenses of a great variety of litigations. The jurisdiction of the court of chancery in reference to creditors’ bills, defined and confirmed by the Eevised Statutes, was limited to those cases, where the execution had been returned unsatisfied. The creditor was compelled to exhaust his legal remedies, before resorting to a court of equity.
It may well be doubted whether the framers of the Code intended to change this rule. It is evident that they sought to simplify and abridge the former proceedings to obtain payment after the return of an execution unsatisfied ; and if they had intended to establish the new remedy of appointing a receiver, and obtaining satisfaction priorto the return of the execution unsatisfied, it is but just to presume, that they would have used some language manifesting such intention. A careful examination of the provisions of the Code upon which the appellant bases this claim, fails to disclose any such language.
So far as this question has come before the courts for consideration, it seems to have been held, that there was no power to appoint a receiver, except when an order for the examination of a judgment debtor had been first obtained (Weyman v. Childs, 44 Barb. 403 ; The Ocean National Bank v. Olcott, 46 N. Y. 18 ; Darrow v. Lee, 16 Abb. Pr. 215 ; Kemp v. Harding, 4 How. Pr. 178 ; Andrew v. The Glenville Woollen Mill, 11 Abb. N. S. 82).
No order for the examination of the judgment debtor had been obtained in the present case, and consequently there was a want of power in the judge to appoint the receiver. He is therefore without legal capacity to act
p. 41
as such. The answer places his authority to'so act its issue. The objection was available and duly taken, by the defendant, and is one that is fatal to the plaintiffs capacity and right to sue. It becomes unnecessary to consider the remaining questions raised by the appeal.
The judgment appealed from, should be affirmed,, with costs.
Sedgwick, J.s concurred.
Cases cited
- Huff v. Knapp 5 N. Y. 65 p. 35
- Porter v. Bronson 29 How. Pr. 292 p. 35
- Kemp v. Harding 4 How. Pr. 178 p. 37, p. 40
- Sherwood v. Buffalo & New-York City Railroad 12 How. Pr. 136 p. 38
- Darrow v. Lee 16 Abb. Pr. 215 p. 38, p. 40
- Wegman v. Childs 44 Barb. 403 p. 40