Terry v. Bange — 57 N.Y. Super. Ct. 546

Majority

p. 546

LUCIEN B. TERRY, et al., Respondents, v. HENRY BANGE, Appellant.

Headnote

Receiver appointedm supplementary proceedings—Jurisdictional facts should appear from 'the order or the papers on which it was granted—Motion for removal of .receiver.

The order that the motion below sought to set aside was made in 1862. The principal ground for its vacation was that it did not appear on the face of the order that the judge granting the same had jurisdiction in the premises.

p. 547

That it did not recite the existence of facts necessary to jurisdiction. The moving papers did not set out the whole of the record of the supplementary proceedings on which the order was made. The order alone was set out, but, in some portion of the moving and opposing papers, it did appear that the necessary jurisdictional facts existed at the time of the entry of the order, and that the whole of the record at the time disclosed that the necessary facts existed and were proper. The power of the judge was derived from Section 298 of the Code.

Held, that the judge having power and- jurisdiction to appoint a receiver, all other directions given in the order as to bond and matters of a like kind, were to be reviewed if they were erroneous by appeal, or, if matters of irregularity, by motion. The appellant has been unsuccessful in his attacks upon the order by appeals, and the irregularity as to the bond has been cured by the order now appealed from, which should be affirmed. Held, also, that it is not a substantial objection to the order that “ The N. Y. Superior Court” was named instead of the correct name, 11 The Superior Court of the city and county of New York.” The words used sufficiently identified the court.

By the Code of Procedure, notice to the judgment creditor was not a condition precedent to the exercise of the power to appoint a receiver. If it be assumed that the receiver is not a resident of the state, and for that reason should be removed, there should be no removal without the same be accompanied by a substitution of a qualified receiver in his place.

Before Sedgwick, Ch. J., Truax and Dugro, JJ.

Decided March 4, 1890.

Appeal from an order denying defendant’s motion to set aside an order appointing a receiver in supplementary proceedings.

II. M. Whitehead, attorney and of counsel, for appellant, argued:—

The order appointing the receiver is void upon its face for the following reasons: (1.) It is not entitled in an action in any court known to the law. There is no “N. Y. Superior Court.” It may be inferred that the Superior court of the city of New York was the court in which the action was pending, but an order appointing a receiver is a muniment of title and authority for action, and should upon its face exhibit the necessary evidence that the person had

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been appointed a receiver of the property of the judgment debtor in proceedings supplementary to execution by a judge or court authorized by law to make such order. (2.) The order does not recite facts necessary to show' that Samuel Garrison-, as Kings county judge, had authority to make it. The county judge in making an order for the examination of a judgment debtor and for a receiver in an action in the Superior Court of the city of New York is acting under a special statute with no general power as judge and must strictly follow the statute. Wibber v. Hobbie, 13 Hun, 382 . All else is without jurisdiction. Bangs v. Selden, 13 Hun, 374 .

In supplementary proceedings before a county judge on a judgment in another court, nothing is to be presumed in favor of his jurisdiction. The facts upon which it rests must be shown affirmatively by the recitals in the order. People v. Huilbert, 5 Hun, 446 . Jurisdiction would be presumed in favor of a • court of general jurisdiction without any recitals. Bangs v. Dunkelfeld, 18 N. Y. 592 . But the authority of an inferior court to act must appear on the face of its proceedings. Chemung National Bank v. Judson, 8 N. Y. 260 . The production of an order made by a court or judge authorized by law to make it, in proceedings supplementary to execution, reciting the facts necessary to give the court or judge authority to act in the proceedings, furnishes conclusive evidence of regularity when attacked collaterally and prima facie evidence when assailed directly. Potter v. Merchants’ Bk., 28 N. Y. 652 ; Wright v. Nostrand, 94 Ib. 45. In 1862 it was necessary among other things to confer jurisdiction or authority to make an order appointing a receiver in supplementary proceedings : 1st.—That the person of whose property a receiver was appointed • should be a judgment debtor. 2d.—That execution should have been returned unsatisfied by the sheriff

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of the county where he resided or had a place of business. Code, § 292. 3d.—That an order for the examination of the judgment debtor should have been made by a judge named in § 292. 4th.—That the debtor should have been examined under oath under such order. § 296, Code. 5th.—That the debtor should have disclosed property not exempt from levy and and sale under execution. Re. Edlings, 35 Hun, 367 . The appointment can only be made on the evidence in the proceedings. Todd v. Crooke, 4 Sand. 694. The voluntary appearance and examination of the judgment debtor cannot give jurisdiction. Sackett v. Newton, 10 How. 560 . The appointment will be discretionary even if the judge has jurisdiction. Dollard v. Taylor, 33 N. Y. Super. Ct. 596 . And can only be made by the judge who granted the order of examination. It must be made in the same manner as if by the court under Section 244. Code, § 298. Under that section a receiver cannot be appointed without notice according to the practice of the court, except under peculiar circumstances, demanding immediate attention, appearing by the papers on which the order was applied for. People v. Morton, 1 Paige, 17; Verplanck v. Mercantile Ins. Co., 2 Ib. 438; Sandford v. Sinclair, 8 Ib. 373; Gibson v. Martin, 8 Ib. 481; Field v. Ripley, 20 Hun, 26 . And in supplementary proceedings only on notice. Kemp v. Harding, 4 Hun, 178 ; Ashley v. Turner, 22 Ib. 226; Barker v. Johnson, 4 Abb. 435 ; Whitney v. Welch, 2 Abb. N. C. 442 ; Hohn v. Epstein, 14 Ib. 322. And verbal notice is insufficient. Ashley v. Turner, 22 Hun, 226 .

The order, therefore, should be vacated because it does not recite any of the facts which confer authority upon the county judge to make the order, to wit: 1st. That the order is made in any action in any court known to the law. 2d. That William Palen was ever appointed the receiver of the prop

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«erty of Henry Bange, it not being recited in the order that Henry Bange was the judgment debtor. 3d. That any execution had been issued upon the judgment to the. sheriff of any county. 4th. That any transcript of the judgment has ever been filed in Kings county where the examination was had. 5th. That the debtor resided in Kings county. 6th. That any execution had been returned unsatisfied. 7th. That the examination was completed, on the contrary it appears that it was not. 8th. That the examination was under oath as required by § 296 of the Code. 9th. That the debtor was present in the court when the motion was made for a receiver or that he had any notice of such motion. He positively denies that he was present or had any notice or knew of such appointment at the time. 10th. That the proceedings were being had under the provisions of the Code relating to supplementary proceedings. 11th. That the order was made on the motion of the judgment creditor or any other person. 12th. That the order directs a bond to “ the clerk of this court,” it not appearing what court it referred to; to be filed in the Kings county clerk’s office. According to law and the practice of the court the bond should have been filed in the clerk’s office of the Superior Court, of the city of New York, or in the clerk’s office “of the county of New York.” That order is filed in the county clerk’s office. There is no other paper of any kind filed with it by which the clerk or any other person may learn who is the judgment debtor referred to in the order. The original order was never filed in the office of the clerk of the county of New York. The title to the property therefore never vested in said receiver, and all his actions as such should be set 'aside. The acts of the receiver, including all actions in law or in equity, should be set aside upon the ground that he has not given such a bond as the

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order of the judge and the practice require. The receiver had no power to act until he had given a bond, and was not invested with title to judgment debtor’s property. Edwards on Recr., 89; 21 How. 469 ; Thomp. on Prov. Rem. 477-480; 26 Barb. 569 , etc.

Nelson Merrill, attorney, and William C. Holbrook of counsel, for respondents, argued:—

The alleged defects in the papers in the proceedings by which Palen was appointed receiver of the property of the above-named Henry Bange are not jurisdictional defects, but are mere irregularities. See Bespondent’s Points on Appeal to the General Term, Second Department; Opinion of Dykman, J., at said General Term. All these questions have been adjudicated and passed upon, not only in the proceedings instituted by said Bange, before the county judge of Kings county and on his appeal to the general term of the second department. References last above cited; See also Opinion of Patterson, J., Palen v. Bushnell, 18 N. Y. Civ. Pro. Rep. 56. But the same were also litigated and passed upon by the supreme court in this department, on the motion to revive and continue the action against the executors of Bushnell. See Opinion of Brady, J., Palen, Receiver, v. Bushnell, 51 Hun, 423 , Dismissal of Appeal, 115 N. Y. 655 . The same were also adjudicated on the motion of Bushnell’s executors for leave to file supplemental answer in the supreme court. See Opinion Patterson, J., Palen v. Bushnell, 18 N. Y. Civ. Pro. Rep. 56.

The order that the motion below asked to be set aside was made in 1862. The principal objection to it was that it* did not appear that the judge allowing the order had jurisdiction to make it. The argument was based

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upon the assertion that the face of the order did not recite the existence of facts necessary to jurisdiction. The moving papers did not set out the whole of the record of the supplementary proceedings. The order alone was set out. In some portions of those papers, and in the opposing papers, it appeared that the jurisdictional facts had existed at the time of the making of the order. In the opposing papers, it was shown that the whole of the record disclosed that the necessary facts existed and had been properly averred. The power of the judge was derived from section 298 of the Code of Procedure. The judge having power and jurisdiction to appoint a receiver, all other directions given in the order as to bond and its character, and matters of a like kind, were to be reviewed if they were erroneous, by appeal, or if irregular, by motion. The appellant has been unsuccessful in his former attacks upon the order so far as he has appealed. The irregularity as to the bond was corrected by the order now appealed from.

Soon after the order was made the receiver began an action to set aside as fraudulent a transfer made by the judgment debtor to third parties. The judgment debtor was made a defendant. He had in that action an opportunity to contest, if not the appointment of the receiver, yet whether by the terms of the order or from what had been done or omitted to be done the receiver had become vested with the cause of action or the right to begin an action upon it. It may be taken for granted that he did not ask, by his motion below, that the receiver should do those things which, being done, would give him the right to bring the action. So far as he asked that the appointment should be set aside he was not entitled to succeed.

It is not a substantial objection to the order that the title of the action named, “TheN. Y. Superior Court,” instead of “ The Superior Court of the city

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of New York.” The words used, as they were used in the papers identified the court.

I do not find that, by the Code of Procedure, notice to the judgment debtor was a condition precedent to the exercise of the power to appoint.

Whether or not the judgment has been paid is a matter to be determined in the action of the receiver who obtained by his complaint a lien upon such equitable assets as were described in it.

If it be assumed that the receiver is not a resident, and that is a reason why he should be removed, there should be no removal without that being accompanied by a substitution of a qualified receiver in his. place.

The order should be affirmed with costs.

Truax and Dugro JJ., concurred.

Cases cited

Bangs v. Duckinfield 18 N. Y. 592 N.Y. p. 548
Voorhees vs. Seymour 26 Barb. 569 N.Y. Sup. Ct. 1857-10-06 p. 551