12 A.D. 492 | N.Y. App. Div. | 1896
On the- 4th day of June, 1896, Jared L. Looschen, the appellant here, caused to be issued out of the City Court a two days’ summons against the defendant, the Muehlfeld and Haynes Piano Company, to recover a certain debt due to him from said company. The sum
The property of the defendant corporation was bound by the execution from the time that it was delivered to the sheriff to be executed. (Code Civ. Proc. § 1405.) All that was necessary to complete the lien was that the sheriff should make an actual levy during the life of the execution. (Hathaway v. Howell, 54 N. Y. 97.) When that had been done, the lien of Looschen upon the property so taken was complete.
It is claimed on the part of the receiver that that lien was divested by the appointment of the receiver and the subsequent filing of his bond, because, as he says, that appointment, when finally completed, related back to the filing of the petition in proceedings for the voluntary dissolution, and this filing was prior to the delivery of the execution to the sheriff.' But such is not the law. When a receiver has duly qualified his appointment takes effect to relate back to the date at which the appointment was made, and not to the date at which the petition was filed. (Matter of Christian Jensen Company for Voluntary Dissolution, 128 N. Y. 550; Matter of Schuyler Steam Tow Boat Co., 136 id. 169.) This
The decision'of Mr. Justice Stover which is cited, to the effect that the appointment of the receiver related to the time of filing the petition, does not apply to this case. That decision was made upon the authority of section -2430 of the Code of Civil Procedure, which holds that a transfer of property • of a corporation, made after the filing of a petition for a voluntary dissolution, is void as against the receiver. The transfer in question in the motion before Mr. Justice Stover was made by the corporation by a general assignment, executed after the petition for voluntary dissolution Was filed. His decision, therefore, that it was void under this section as against the receiver, was correct. But a judgment is not a sale or transfer pursuant to that section. Where a just debt exists against a corporation, Upon which an action has been brought, the statute does not require the .corporation to attempt to defend the action if it has no legal defense, and a judgment entered upon such an action is valid, (French v. Andrews, 145 N. Y. 441.) It is true that an insolvent corporation is forbidden to suffer a judgment against it with intent to give a preference to any creditor ■ (Stock Corp. Law [Laws of 1892, chap. 688], § 48); but where the corporation merely fails to put in a defense to a just debt it is not to be inferred from that fact alone that the judgment was suffered with intent to give a preference, and the judgment thus entered is not invalid. (Varnum v. Hart, 119 N. Y. 101; Milbank v. de Riesthal, 82 Hun, 537.) Such a judgment •does not dome within section 2430 of the Code of Civil Procedure, and is not rendered invalid by any of the provisions of that section, . The case is, therefore, not. within the rule laid down by Mr. Justice Stover. When it appeared that a valid levy had been made by the sheriff before'the order appointing the receiver had been entered, there was mo reason why the lien acquired, by that levy should be postponed to the title of the receiver. The order of the court, therefore, which deprived Looschen of the lien which he had acquired, was not a proper one and should not have been made. But the •protection 'of Looschen’s rights does not require that this, order should'be entirely reversed. He is entitled-to have the proceeds of
"Van Brunt, P. J., Barrett, O’Brien and Ingraham, JJ., concurred.
Order modified as directed in opinion, and affirmed, as modified, without costs to either party.