George C. v. Foster

18 How. Pr. 50 | The Superior Court of New York City | 1859

By the court—Bosworth, Ch. J.

The interest of Mary E. Foster in the unaccrued income of the fund, held in trust by Hoguet and Getty, is inalienable by her. (Clute agt. Bool, 8 Paige, 83; 1 R. S. 773, § 2; id. 729, § 63.)

The appointment of a receiver upon a creditor’s bill will not, per se, vest in the receiver a title to such income, though income may have accrued in the hands of the trustees prior to such appointment, and be in their hands when such appointment is made: (Degraw agt. Clason, 11 Paige, 136; 2 R. S. 174, §§ 41, 42.)

It can only be determined by action whether all of such income is necessary for the support of the judgment-debtor (the cestui que trust), and whether so much as may be unnecessary for her support, shall be paid to her judgment-creditors. (Sillick agt. Mason, 2 Barb. Ch. R. 79.) Not only the debtor, but the trustees, must be parties to such action, that the judgment which shall be given may protect them in making payments of parts of the income to the j udgment-creditor of the cestui que trust; and that they, as the parties having the legal title to the property in question, and charged by law with the duty of applying the income of it to the support of the judgment-debtor, may be heard upon the question, whether an application of the whole is essential to a proper performance of their duty ? (Scott agt. Nevins, 6 Duer, 672, and cases cited above.)

The receiver appointed by the order of the 9th of June, 1857, was not, by virtue of his appointment, vested with the title to any income that might accrue subsequent to that date. The $650 which he subsequently received, and which forms the subject of the present controversy, accrued after the appointment of the receiver made on the 9th of June, 1857.

As we construe the order of the 9 th of June, 1857, and the order modifying it, made on the 5th of December, 1857, A. T. Stewart & Co. were required to proceed by an action (to be commenced within thirty days), to the end that it might be determined in such action whether they, as judgment-creditors of Mary E. Foster, should be permitted to receive, upon their judgment, the excess of the income over and above $800 per annum, that might accrue after the 9th of June, 1857, or any, and if any, what part of the income of the said fund?

It appears that such an action was brought, and that the complaint upon the hearing of the action was dismissed. The order of the 5th of December, 1857, contains no direction what shall be done with the excess of income over $800 per annum, which may have been paid'to the receiver between the 9th of June, 1857, and the dismissal of such complaint, unless the construction be claimed, that it directs such excess of income, in the hands of the receiver at the time of its date, to be paid to A. T. Stewart & Co.

In that condition of things, Campbell was appointed a receiver in the action in this court, on the 25th of March, 1858. The motion of the Messrs. Genet, that the receiver should pay the $650 alleged to be in his hands, and received by him, as has been stated, was properly denied, because,

1. The judge of this court, before whom the supplementary proceedings were pending, had not determined, even if he had the power to pass upon the question, that the whole income was not necessary to the debtor’s support.

- 2. The receiver was not a debtor to Mary E. Foster, in respect to the $650 in his hands; nor was the money in his hands her property. The legal title to it, except so far as such title may have been modified or affected by the orders of June 9th and December 2d, 1857, was in the trustees; and the duty of applying it to her support was confided to them by law, and would continue, until by the judgment of some competent tribunal it had been taken from them as unnecessary to her support, and had, by such judgment, been specially appropriated. It is only “ property of the judgment-debtor ” which, by section '297, a judge can order to be applied towards the satisfaction of the judgment.

. - We do not intend to deny if income had accrued and was .in the hands of trustees, which they conceded to be unnecessary for-her proper support, that so much of such accrued income as they conceded to be unnecessary for that purpose might not be applied by an order of a judge, made in the supplementary proceedings. But this appeal does not presen t any such question, and we are not, therefore, called upon to express'any opinion in relation to it.

- 8. Whatever may have been the interest of Mary E. Foster ih the $650 in-question, it appeared, upon the motion on which the order appealed from was made, that the receiver, as such, claimed an interest in the money adverse to Mary E. Foster, and made such' claim by virtue of his appointment of the 9th of June, 1857 ; and the orders of the 9th of June and the 2d of December, 1857, denied that he was her debtor in respect thereof, and also claimed that, by virtue of the order of the 9th óf- June, 1857, under .which he received it, and the order of the 2d of December, 1857, it was his duty to pay it to A. T. Stewart■&. Co.'; that they claimed to be entitled to it by force, of such -orders,-and that under such claim he had paid it to their attorney. ..Under such circumstances, the motion should have been denied. Section 299 of the Code does not authorize a judge to direct, by order, that money held by a third person, and in respect to which such adverse claims are made, shall be paid over by such third person to a judgment-creditor, who is seeking to reach it.

4. The money in question did not come to the hands of Campbell by virtue of his receivership, derived from his appointment by a judge of this court. When appointed receiver by a judge of this court, he held the money as a receiver appointed by a judge of the court of common pleas, and had received it by virtue of the orders of June 9th and December 2d, 1857. His appointment by a judge of this court, as receiver of all the property and effects of Mary E. Foster, would not, by its own force, have vested in him any title to the moneys, had they then been in the hands of the trustees. (De Graw agt. Clason, 11 Paige, 136.) It is difficult to see how the fact, that, by order of a judge of the court of common pleas, such moneys had been paid by the trustees into the hands of the receiver, to abide the result of a suit to be brought to determine whether they should be applied otherwise than as the trust requires, and which suit was pending when they were paid to him, can give the receiver, as a receiver appointed by a judge of this court, any title to or power over them, which such appointment would not have conferred, had the moneys at the time it was made been in the hands of the trustees un appropriated.

It is not the duty or province of the court to undertake to advise the remedy to be pursued, to determine whether the Messrs. Genet, as between themselves and Mary E. Foster, or as between themselves and A. T. Stewart & Co., are equitably entitled to the money in question, or whether it may be recovered of Mr. Campbell in an action brought for that purpose by her present trustees.

Entertaining these views we have expressed, we have not deemed it necessary to consider the objections taken to the validity of the proceedings, on the part of the present plaintiffs, supplementary to execution, nor to the order appealed from as being an order made at special term, and not- by a judge of the court, out of court.

We think the order appealed from is not erroneous, and it is, therefore, affirmed, with $10 costs.