Rutter v. Tallis — 7 N.Y. Super. Ct. 610

Majority

p. 610

Rutter v. Tallis, and others.

Headnote

The title of a receiver exists, by relation, from the date of the order directing his appointment.

(Before Oakley, Dues, & Boswokth, J. J.)

Feb. 28, 1852.

This was a motion to compel H. W. Beckwith, Esq., receiver of the partnership effects of the defendants, to satisfy a judgment which the plaintiff had obtained on the 24th of December,

p. 611

1851, for about $800. It was originally made before Mr. Justice Duer, at special term, but was by him, after a partial argument, adjourned to be heard before a full bench at general term, by reason of the important principles involved.

The facts were these.' The defendants were a firm doing business in the city of New York, but Mr. Tallis, the senior partner, resided in England. The firm having become deeply embarrassed, the partners, Willoughby and Rogers, without the authority or assent of Mr. Tallis, made an assignment of all the partnership effects to one Martin, in trust, to pay in full certain creditors of the firm, and then to distribute the residue among all others ratably. As soon as this transaction came to the notice of Mr. Tallis, he at once commenced a suit in this court to vacate the assignment, and distribute the property among all the creditors equally, and prayed the appointment of a receiver. The assignee and the other partners put in their answers, insisting on the validity of the assignment, and replies were filed. On the pleadings, a motion was made before Mr. Justice Mason, for a receiver. The motion was granted, and a reference ordered to select a person suitable for the office.

While this inquiry was pending in the referee’s office, Rutter obtained his judgment and issued execution, which was levied on the assigned property.

Subsequently, on the 9th of January, 1852, Mr. Beckwith Avas appointed receiver in the suit of Tallis against his partners and their assignee. He immediately claimed the property from the sheriff, on the ground that his appointment related back to the date of the order of reference, and thus over-rode the levy. The jury summoned by the sheriff to try the question, sustained the claim, and the levy was abandoned. The receiver took the property, sold it, and received the proceeds.

The suit of Tallis was afterwards heard, and the court decreed the assignment to be fraudulent and void. That the assignee transfer all the property to the receiver, and that a perpetual injunction issue.

The plaintiff, Rutter, now made his motion as above stated.

C. W. Sandford, for plaintiff.

A. C. Bradley, for the receiver.

p. 612

The court denied the motion principally upon the ground, that when an order of reference is made for the appointment of a receiver, and a receiver is subsequently appointed, his title vests, by relation, from the date of the order, and attaches upon all the property to which the receivership could properly extend, exactly in the same manner, and with the same effect, as if the order, instead of directing a reference, had named the receiver.

The court also intimated very strongly its opinion, that it would not permit a suit for the dissolution of a partnership and the settlement of the partnership debts, to be discontinued by the act or consent of the parties. There must be a special application to the court, and notice to the partnership creditors.