Importers & Traders' National Bank v. Quackenbush, 143 N.Y. 567

143 N.Y. 567 | NY | 1894

The plaintiff, on the 27th of March, 1894, obtained from a justice of the Supreme Court two orders requiring the defendant to appear before a referee named and be examined in proceedings supplementary to execution as to his property. The proceedings were based upon two judgments recovered by the plaintiff against the defendant and others on the 22d day of January, 1879, the judgment roll in each case having been filed on that day. Execution was issued upon these judgments immediately thereafter and returned unsatisfied. In March, 1894, new executions were issued upon these judgments and returned unsatisfied as a step preliminary to these proceedings. The defendant moved at Special Term to vacate the orders, but the motion was denied and these orders have been affirmed on appeal. About the time of docketing these judgments other creditors also obtained judgments, upon some of which proceedings of this character were instituted and examinations had, but no property was discovered.

This appeal presents the question whether a judgment creditor is entitled to maintain proceedings supplementary to execution fifteen years after the docketing of his judgments and after they had ceased to be a lien upon real estate and chattels real. It may be safely asserted that every remedy which a creditor has by law for the enforcement of the debt becomes barred by the lapse of some definite period of time, and when barred it cannot be revived at his mere will and pleasure without some new proceeding for that purpose of which the debtor has notice. The judgment itself is barred after the lapse of twenty years, and it is reasonable to suppose that at some time within that period the debtor is relieved by the lapse of time from proceedings of this character. There ought to be some limitation, and one of the questions here is what that limitation is. By section 2435 of the Code of Civil Procedure the creditor is entitled to institute these proceedings by obtaining an order for the examination of the debtor at any time within ten years after the return of an execution unsatisfied; therefore, the rights of the plaintiff to maintain these proceedings upon the judgments accrued to him as early as the year 1879; and the ten years expired in 1889. The decisions of the courts below are to the effect, however, that the plaintiff can revive the right at its own pleasure and extend the period indefinitely by simply issuing new executions from time to time, and thus setting the ten years running from the date of the return of the last execution. This conclusion is deduced from a literal reading of the statute which authorizes the order at any time after the return of an execution unsatisfied, and if followed to its logical result would permit the plaintiff to institute the proceedings after twenty years when the judgment itself had become barred. We think that when the statute gave the creditor ten years from the date of the return of an execution to obtain the order that this period was intended as a limitation. The right accrued after the return of the first execution and became barred after the lapse of ten years in the absence of some new proceeding to revive it to which the debtor is a party by notice or otherwise. It seems to me that this proposition is sustained by authority. (Conyngham v. Duffy, 125 N.Y. 200; Baumler v.Ackerman, 63 Hun, 40.) It is unnecessary to determine the meaning or application of section 1252 of the Code with respect to proceedings of this character, as it is obvious that the plaintiff did not comply with it or proceed under it. The plaintiff may, however, revive his right by a suit upon the judgment, which he may prosecute with the permission of the court, and having obtained a new judgment he is in the same position that he was before the ten years began to run. (Code, § 1913, sub. 2.) But the plaintiff was not entitled to this remedy for another reason, and that is that, under the circumstances of the case, it did not and could not comply with conditions which courts of equity have always held to be indispensable in order to maintain these proceedings. Proceedings supplementary to execution are remedies in equity for the collection of the creditor's judgment, and were intended as a substitute for the creditor's bill, as formerly used in chancery. (Lynch v.Johnson, 48 N.Y. 27; Barnes v. Morgan, 3 Hun, 703; Storm v. Waddell, 2 Sand. Ch. 494.) In such cases it was the settled rule that unless the creditor had exhausted all his remedies at law, or in case he was not in a position to avail himself of all the ordinary remedies which courts of law gave for the enforcement of judgments, the bill in equity could not be maintained and would be dismissed. The creditor must pursue his remedy at law to every available extent before he can resort to equity for relief. (Dix v. Briggs, 9 Paige, 595; Crippen v.Hudson, 13 N.Y. 161; Dunlevy v. Tallmadge, 32 id. 460;Child v. Brace, 4 Paige, 309; Geery v. Geery, 63 N.Y. 256;Adsit v. Bulter, 87 id. 588; Ocean Bank v. Olcott, 46 id. 12.)

The same rule applies to proceedings supplementary to execution, and it is not enough that forms are observed by the return of an execution which is not effective to reach all of the debtor's property. (Austin v. Figueira, 7 Paige, 58.) Accordingly it has been held that the proceedings cannot be had upon a foreign judgment, a judgment rendered by a court of the United States or upon judgments in rem where personal service was not made since they do not bind all the debtor's property. (Rocky Mountain National Bank v. Bliss, 89 N.Y. 338; Thomas v. Merchants' Bank, 9 Paige, 216.) If the creditor's judgment, by reason of the lapse of time, has ceased to be a lien upon the realty of the debtor, his remedy at law cannot be exhausted, and, therefore, he must, by some proper proceeding, reinstate the lien, otherwise the issue and return of an execution would become an idle and unmeaning ceremony. (Carpenter v. Stilwell,11 N.Y. 61-71.)

Under section 1251 of the Code the lien of the plaintiff's judgments upon the real estate and chattels real of the defendant ceased after ten years, and, hence, when the last executions were issued in 1894 they were not and could not be effective to reach all the debtor's property or to exhaust the legal remedy. The return on these executions is no evidence that the defendant did not have at that time abundant real estate, subject to sale upon execution, with which to satisfy the judgments.

The court is authorized in these proceedings by section 2468 of the Code to appoint a receiver of all the debtor's property, and it is provided that when the receiver qualifies he shall become vested with the title to the debtor's real property upon filing the order appointing him or a certified copy thereof in the county where the real estate is situated. But this provision cannot refer to real estate which is not bound by the lien of any judgment, or against which no execution has been issued upon which it could be sold. As to real estate so situated, the creditor does not need a receiver or any other equitable relief. A court of equity will never appoint a receiver for the purpose of doing for the creditor what he may do for himself. (Sollory v. Leaver, L.R. [9 Eq. C.] 22; Corey v. Long, 12 Abb. Pr. [N.S.] 434; Orphan Asylum v. McCartee, Hop. Ch. 435.)

When the various provisions of the Code authorizing these proceedings are examined and considered as a general scheme to take the place of the former bill in chancery, the conclusion is reasonable that they are all based upon the assumption that at the time of issuing the execution the creditor had a judgment which was a lien on the debtor's real estate and chattels real which would make the return effective to exhaust all remedies at law. They were not framed to meet a case like this, where at best the execution could reach only personal property. While the statute in terms permits the creditor to apply for the order within ten years from the return of an execution upon the judgment unsatisfied, yet it must mean, according to every fair analogy, an execution which is effective to exhaust the remedy at law, and, therefore, must refer to a judgment which is a lien upon real estate.

If this view is correct it follows that the orders appealed from should be reversed, and the orders requiring the defendant to appear for examination before the referee should be vacated, with one bill of costs to the defendant in all courts.

All concur, except PECKHAM, J., not sitting.

Ordered accordingly.