Henry v. Derby

Headnote

Costs, compelling persons not parties to record to pay—motion for, service of notice on what attorneys insufficient—Ex parte order, one not party to the record—Findings, effect and validity of.

Neither the attorney for a receiver appointed in supplementary proceedings in an action brought by him, nor the attorney for the plaintiff in the action upon the judgments in which the supplementary proceedings were instituted, represents the plaintiff in the original action in a proceeding instituted to compel him to pay the costs of the receiver’s action. An order compelling such plaintiff to pay said costs, made on notice only to either or both of such attorneys, is an ex parte order as to such plaintiff.

Where an order is made under which proceedings might be taken at once against a person not a party to the record or his property to enforce it, and such order is ex parte as to him, he has an interest in having it set aside so that proceedings on it might not even be begun ; and it is proper for him to move to set it aside, and the motion should be granted.

Findings in an action brought by a receiver appointed in supplementary proceedings, to the effect that the action was brought at the request of the judgment creditor, on whose judgment the supplementary proceedings were instituted, and that he was beneficially interested in it, he not being a party to the action, are without validity as to him.

Appeal by Willis M. Ranney from an order denying

his motion to vacate an order directing him to pay the costs of the action.

The facts appear in the opinion.

argued :—I. The order was void for want of jurisdiction .in the court to make it. The service of notice of the application upon the attorney of the nominal plaintiff did not confer jurisdiction to grant it (Carnahan v. Pond, 15 Abb. Pr. 194 ; Ward v. Roy, 69 N. Y. 96 ).

II. Service of notice of the application upon the attorney who had appeared for Mr. Banney in another action, in another court, in another county, some six months before, did not confer jurisdiction upon this court to grant it. Generally, an attorney’s authority ends with the entry of judgment (Welradt v. Maynard, 3 Barb. 584 ; Lusk v. Hastings, 1 Hill, 656 ). After much discussion it was held that, in the absence of statutory provisions to the contrary, notice of motion for a receiver of a judgment debtor might be served upon the latter’s attorney in the action, because the proceeding was a proceeding in the action, the parties and the court being the same (De Berner v. Drew, 57 Barb. 438 ). Ho case has gone farther than this. But, surely, the collection of defendants’ costs in Henry v. Derby, in the superior court, is not “ a proceeding in the action,” of Ranney v. Chichester in the Kings county supreme • court, and to contend that an appearance in one is an appearance in the other, is idle (Howard Ins. Co. v. Halsey, 4 Sandf. 565 ; 8 N. Y. 271 ).

III. The proceeding to charge a third party with the, costs of an action, authorized by section 3241, is a special proceeding, and the Code expressly requires personal service, in every instance, of the notice or other paper by which a special proceeding is commenced (§ 433). Even if it were the plaintiff that defendant was seéking to collect the costs from, the supplementary proceedings he would institute would be a “special proceeding” (Code,

§ 2433). And so much the more is it a special proceeding by which he now seeks relief, not only different from that demanded in his answer, but against a person whose name did not appear in the summons (Roe v. Boyle, 81 N. Y. 305 ; Marvin v. Marvin, 78 Ib. 541). The preceding cases were, it is true, under the statute, and the present one under the Code ; but, so far as this motion is concerned, the provisions of the two are identical. And proceedings under this Code provision also have been judicially held to be special proceedings (Matter of Tyng, 17 Week. Dig. 234).

argued. I. There is nothing in section 3247 of the Code which requires personal, or, in fact, any other notice of the application to be served upon the person sought to be charged with the payment of the costs. The pre-requisite to granting the order is that the court shall determine that the “action is brought in the name of another by a transferee of the cause of action, or by any other person who is beneficially interested therein.” Where this question has not been determined prior to the application for the order, the party sought to be charged is doubtless entitled to an opportunity to be heard upon the question of his liability ; but where, as in the case at bar, the very judgment granting the costs has determined that the was brought for the beneficial interest of the party sought to be charged, thereby disposing of the only question which could be litigated upon the hearing of the application, it is respectfully submitted that the order might have been granted ex parte upon the judgment-roll alone.

II. A receiver in supplementary proceedings represents not only the debtor, but the creditor at whose instance he was appointed (Cummings v. Egerton, 9 Bosw. 684 ). Under section 3247 the party “interested is hable for costs in the like cases and to the same extent as if he was the plaintiff.” Rule 79 of the General Rules of Practice provides that: “Whenever a receiver appointed under

proceedings supplementary to execution shall apply for leave to bring an action, he shall present and file with his application the written request of the creditor in whose behalf he was appointed, that such action be brought; or else he shall give a bond, with sufficient security and properly acknowledged and approved by the court, to the person against whom the action is to be brought, conditioned for the payment of any costs which may be recovered against such receiver. And leave to bring actions shall not be granted except on such written request, or on giving such security.” The combination of these rules makes it emphatically clear that for all the purposes of liability for costs the judgment creditor, at whose instance and in whose behalf the receiver is appointed, is to be regarded as the real plaintiff. The filing of the written request that the action be brought is in itself a voluntary submission to the jurisdiction of the court, and any order or judgment thereafter made or rendered in the action thus brought at his request, binds him as if he were the nominal as well as the real plaintiff. A judgment is conclusive upon the parties to the action and their privies. The term “parties” in this connection is not restricted to those who are parties upon the record. It includes all who have a direct interest in the subject matter of the suit, a right to make a defense or control the proceedings (Bates v. Stanton, 1 Duer, 79 .; Burr v. Bigler, 16 Abb. Pr. 177 ). A receiver is the privy by representation of the party at whose instance he was appointed (Pinkham v. Borst, 24 How. Pr. 246 ). The real parties in interest in an action at law, though they were not the nominal plaintiffs, are, in equity, bound by the judgment, equally as though they had been nominally parties (Southgate v. Montgomery, 1 Paige Ch. 41 ). The attorney for the nominal plaintiff is, therefore, the attorney for the real plaintiff, and notice of any application to bind the latter is properly served upon the attorney of record of the former (Code, § 799).

III. The judgment creditor is charged with the costs

of this suit because of the fact that, having recovered the judgment in the former action, this case was prosecuted for his sole benefit. And notice in the former action, or in the supplementary proceedings, might properly, indeed must have been, served upon his attorney of record therein. Therefore, since this application was made against him as the plaintiff in the former action, notice was properly served upon his attorney in said action (Code, § 199). After the double service thus made, either of which would have been sufficient, it becomes apparent how purely technical and devoid of real merit the question involved in this appeal is.

IV. The application under section 3241 of the Code is a motion in the action, and not a special proceeding. The language of this section is that “ the court may by order direct the person so liable to pay them.” “in application for an order is a motion ” (Code § 168). And the order must, of course, be granted in the action. The former proceeding under the Revised Statutes: 3 R. S. (Banks’ Sixth Ed.) 534, § 321 ; 2 Edmonds Ed. 643, § 44, was a special proceeding, and for this reason the cases cited by appellant below are not in point.