Hyperlawhypertext legal database Wright v. Nostrand 53 N.Y. Super. Ct. 381

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Wright v. Nostrand

53 N.Y. Super. Ct. 381 21 Jones & S. 381 Court N.Y. Super. Ct. Decision date 1886-06-08 English

Delivered by O’Gorman, J.

Contents

Majority

p. 381
BENJAMIN WRIGHT, as Receiver, &c., Appellant, v. MARY A. NOSTRAND, et al., Respondents.

Headnote

Bestitution of moneys collected as costs—When ordered against receiver individually.
Plaintiff, as a receiver, obtained a judgment in his favor at special term, which, after reversal at general term, was upheld by the court of appeals, and pilamtiff entered a money judgment for the costs, which were thereafter paid to the sheriff, and by the latter turned over to plaintiff's attorney, who retained the same, the amount being composed of disbursements made by the attorney personally and his taxed costs. Thereafter, the court of appeals modified their said judgment and disallowed the costs of the appeals. An order of restitution under $ 1323. Code Civ. Pro. was
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obtained at special term, holding the receiver liable personally for the repayment of said costs, and also his attorney.
Meld, on appeal therefrom, that the granting of the order was within the power of the court under said section, and was discretionary; that the transaction was in effect as if the money had been received by the receiver, and by him paid to his attorney in reduction of his claim against the receiver individually for services in the litigation, and therefore that the receiver should be held personally liable ; finally that said order in so far as it holds the attorney liable, should be reversed.
Before Sedgwick, Oh. J., and O’Gorman, J.
Decided June 8, 1886.
Appeal by plaintiff from order made at special term, that he restore to defendant, Mary A. Nostrand, $471.27, being amount of costs collected by his attorney under a judgment obtained against her in this court at special term (See 47 Super. Ct. 441).
That judgment was first affirmed by the court of appeals. Afterwards it was, on reconsideration by that court, modified in certain particulars, and among other things, the costs of the appeals amounting to the above sum were disallowed, and restitution was claimed under section 1,323 of the Code, the same having been collected prior to the modification of the judgment aforesaid.
The order appealed from required the plaintiff personally, or his attorney, to pay back the costs to the defendant’s attorney within ten days from entry of the order.
E. J. Spink, attorney, for appellant:
I. It may well be questioned whether the court, by summary proceeding on motion, can compel the restitution of this money from either the receiver or his attorney. It is not a case of misconduct of an officer of the court or of payment by mistake. The money was as lawfully collected and paid as any money ever paid over on an execution, to an attorney. It will not be claimed that the subsequent action of the court could have a retroactive power to make an act unlawful or wrong, which, when committed, was wholly lawful and proper. The remedy then is by action; or if not, the power of the court
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arises out of facts occurring since the receipt of the money, and warrants the court in making its order against its officer who received the money.
II. A receiver acting under the direction of the court is not personally liable for costs unless he has been guilty of mismanagement, misconduct or bad faith (Devendorf v. Dickinson, 21 How. 275 ; § 317 Code Proc.; § 3246 Code Civ. Proc.; Marsh v. Hussey, 4 Bos. 614; Wheeler v. Wright, 14 Abb. 353 ).
III. A receiver acting as an officer of the court and under its direction simply is liable only for his own acts, neglect or misconduct, and not for that of an agent, attorney or employee (Camp v. Barney, 4 Hun, 373 ; Devendorf v. Dickinson, 21 How. 275 ; Cardot v. Barney, 63 N. Y. 281 -290).
IV. The order in effect imposes a penalty upon Mr. Wright. This the court has no power to do, except for some alleged and adjudicated misconduct. He has received no compensation as receiver. He has not, and never had, any funds as receiver. These costs never came to his hands, and he never had the power to collect them. He could not recover them from his attorney, for there is no privity between them. The attorney was employed for the receiver and has acted as such, and not for Mr. Wright personally. Mr. Wright cannot pay as receiver, for as such he has nothing. If he pays personally, he can have no remedy against any one for restoration.
V. This judgment was for costs solely. The disbursements had been made by the attorney himself. He had a lien upon the judgment for his costs, which in this case was the whole of it. He was in law the equitable assignee of the judgment, and had the right as against the plaintiff to collect it, and apply it to his own use (Keenan v. Dorflinger, 19 How. 153 ; Fox v. Fox, 24 Ib. 409; Cregier v. Cheesbrough, 25 Ib. 200; Haight v. Holcomb, 16 Ib. 160 ; aff’d in part, 16 Ib. 173; Rooney v. Second Avenue R. R. Co., 18 N. Y. 368 ; McGregor v.
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Comstock, 28 Ib. 237; Ward v. Wadsworth, 1 E. D. Smith, 598).
VI. If the receiver had known of the collection of these costs he could not lawfully have claimed that they be paid over to him as such receiver, or personally, nor have compelled the attorney by any process to so pay them over.
VII. Where, as in this case, a receiver has been appointed in supplementary proceedings, and the written request of the judgment creditor is presented and filed with the order granting leave to sue, the creditor is personally liable for costs (Rule 79, General Rules Practice, in Thompson v. McCloskey, 5 Law Bull. 19 ; McHarg v. Donnelly, 27 Barb. 100 ).
VIII. The attorney himself could not claim that Mr. Wright personally should pay his costs. He could only be entitled to them out of funds in the hands of the receiver as such—or from the real parties in interest—the judgment creditors at whose request, and for whose benefit the action was prosecuted, and if the costs are to be restored, either the attorney who has received them or the parties for whose benefit he acted should make the restoration.
IX. It is submitted that the order appealed from if not reversed, should be modified as respects the plaintiff, so as to require him to restore as receiver only ánd out of any funds which may have, or shall come to his hands as such, and not brand him with the imputation of misconduct which must attach to a compulsory personal payment. .
Eclwarcl P. Wilder, for respondent:
I. The power to order restitution of moneys collected under a judgment which has subsequently been vacated or modified exists by virtue of the Code, § 1323 (Marvin v. Brewster Mining Co., 56 N. Y. 671 ; Whitbeck v. Patterson, 22 Barb. 83 ; Estus v. Baldwin, 9 How. Pr. 80 ; Hunt v. Westervelt, 4 E. D. S. 225; Kennedy v. O’Brien, 2 Ib. 41). Nor can any question be raised as to whether the
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present application for restitution should have been made to the general term rather than to the special term. The power conferred upon the general term cannot be deemed to be to the exclusion of the special term An order now made upon this appeal would come strictly within the language of § 1323 (Tracy v. Talmadge, 1 Abb. Pr. 469 ; Anon v. Anon, 10 How. Pr. 253 ). The special term may hear all questions that could come before the general term (Bliss’s Code, Notes to § 235 ; Mason v. Jones, 1 C. R. N. S. 335 ; Corning v. Powers, 9 How. Pr. 54 ). Unless the power vested in this court by § 1323 can be exercised in the present case that section becomes nugatory and void. That it has frequently been exercised, see Marshall v. Macey ( 10 Abb. N. C. 87 ) ; Britton v. Phillips ( 24 How. Pr. 111 ). That its exercise at special term has been upheld, see Holloway v. Stephens ( 1 Hun, 308 ; S. C., 58 N. Y. 670 ); Young v. Brush ( 18 Abb. Pr. 181 ).
II. There is no legal force in the plaintiff’s contention that the order should have required him to make restitution only out of such moneys as he might hold in his capacity as receiver. As a matter of fact, plaintiff brought this suit at the request of the creditors of the judgment debtor. The moment that he brought this suit, he assumed all the risks and incidents of the litigation. The fact that plaintiff has realized nothing personally from the litigation is no reason why the defendant should be without redress, when plaintiff himself is amply protected by the requesting creditors. When plaintiff employed his attorney, he clothed him with sufficient authority to take all the legitimate steps necessary in the progress of the action ; and when the attorney acts within the scope of his authority, his principal is bound by his acts (Guilleaum v. Bowe, 94 N. Y. 271 ; Boucher v. Blanchard, 86 Ib. 256). It is sufficient for the purposes of this motion that the law in form awards the costs of action to the party, although it permits him to delegate to his attorney the right to collect them.
III. The order for restitution is properly directed
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against the plaintiff’s attorney, as well as against the plaintiff, notwithstanding his agency, because the money is traced and found in his hands.

By the Court.

(After stating the facts.)—The plaintiff contends that he should be held liable only in his official capacity, as receiver, and only to the extent of any money that may have come into his hands as receiver, and that the order should be modified accordingly.

The Code provides, in § 1323, that when a final judgment 03* order' is reversed or modified upon appeal, the appellate court, or the general term of the same court, may make or compel restitution of property, &c.

On the modification by the court of appeals of their first judgment against the defendants, a motion for restitution was made there and denied, the court expressing doubt as to its power, and referring the question to the superior court, as having undoubted jurisdiction ovér the execution, on which the money was paid, and over .the receiver, who was its officer.

The granting or denying the motion was within the judicial discretion of this court (Marvin v. Brewster, &c. Co. 56 N. Y. 671 ). The plaintiff was duly appointed receiver by order of this court, and commenced and prosecuted this action against the defendant by order of this court. He never personally received any of the money of which restitution is claimed. It was paid over by the sheriff to the plaintiff’s attorney, and the amount was composed largely of disbursements made by the attorney himself, in addition to his taxed costs, for which the attorney would have a valid claim against the receiver personally.

This money, therefore, thus paid to .the receiver’s attorney, was in effect, as if it had been first paid to the receiver himself, and by him paid to his attorney in satisfaction or reduction of the attorney’s claim against the receiver individually, for professional services rendered in the litigation (Langley v. Warner, 3 N. Y. 327 ).

p. 387
As this payment made by defendant, so far inured to the receiver’s benefit personally,- it is but just that he should be held personally responsible for its repayment.

The order appealed from is, therefore, affirmed, with costs, except in so far as it holds the defendant’s attorney liable to repay the costs or any part thereof, and in that respect the order appealed from is reversed, without costs.

Sedg-wiok, Oh. J., concurred.

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