Droege v. Baxter

79 N.Y.S. 29 | N.Y. App. Div. | 1902

O’Brien, J.:

The appellant’s first point is that the order appealed from is not authorized by section 3247 of the Code of Civil Procedure, which provides that “ where an action is brought in the name of another by a * * * person who is beneficially interested therein * * * the * * * person so interested is liable for costs, * * * and * * * the court may by order direct the person so liable to pay them.” The appellant argues that in such a case the action must be begun and conducted under the direction of such person, and that here the action was conducted and brought by the receiver in the Supreme Court contrary to instructions. The answer to this is, that the written request authorized the bringing of the action, and the order stated “ in any of the courts of record,” and the receiver averred that no objection was made till after the action was begun, and further, that the receiver was not directed to discontinue such action. These contentions the court resolved in favor of the receiver.

The second point is that the statements of Reitmari’s attorney to the receiver cannot be used against Reitman. This is answered by the fact appearing that such attorney was brought in and presented affidavits in favor of Reitman in opposition to the motion, and it was, therefore, proper that the receiver should be allowed to deny such statements. Furthermore, the facts are not changed if all the statements of the attorney be disregarded, for the receiver denies that Reitman directed him not to bring the action in the Supreme Court.

The third and more serious point of the appellant is, that the request to sue did not cover the right to appeal, and that as costs of appeal were included the order must be reversed in toto. It was not the receiver, however, but the defendants who first appealed and the receiver was surely justified in defending on appeal a judgment in his favor. Though beaten on appeal it cannot be said that the receiver did an improper or unwarranted act in appealing to the Court of Appeals unless it has Been shown that the creditor had disapproved such act. Although the creditor knew that the action was going on in the Supreme Court he took no steps to discontinue it, and by his thus leaving the matter with the receiver it seems but just that the appeal, conducted in good faith by the receiver, should

be approved. In Ward v. Roy (69 N. Y. 96) it was held that “ if a creditor at whose instance a receiver has been appointed, and especially if he is solely interested, instigates and conducts a prosecution for his own benefit through the receiver, the obligation to pay costs created by the statute is equitably as binding on him as if the legal machinery was not employed.” The appellant insists that he did not conduct the case and did not direct the appeal, but this is a begging of the question, it appearing that he had the receiver appointed for the very purpose of pursuing and securing, if possible, the property for his sole benefit.

The order, therefore, should be affirmed, with ten dollars costs and disbursements.

Van Brunt, P. J., Ingraham, McLaughlin and Hatch, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.