Palen v. Bushnell

| N.Y. Sup. Ct. | Dec 2, 1889

Patterson, J.

This is an application made on behalf of the executors of JE. L. Bushnell, deceased, for leave to file a supplemental answer in this action, which has been pending in this court for 26 years, and which was brought by the plaintiff, as receiver of the property of Henry Bange, a judgment debtor, to recover certain property, or the value thereof, which it is claimed was unlawfully transferred to Mr. Bushnell in his life-time, the action having originally been brought against him, and, since his death, having been revived against' his personal representatives. Concerning the right of the plaintiff, as receiver, to maintain the action, no question can be raised at this time, unless the defendants are permitted to set up certain matters which they now desire to urge respecting the regularity and legality of his appointment as receiver. To refer to such matters specifically, they may be stated as follows: First, that the receiver never had any right to institute this action, because he never received any authority from the court to commence or maintain it; second, that he is, and has been for many years, a non-resident of this state; third, that he was never regularly appointed receiver; fourth, that he filed an improper bond, and that there is no one now living liable upon the bond. So far as all these matters are concerned, I think they have been disposed of by what has been determined in proceedings in the second department,¹ referred to in the opposing affidavits, and fully presented on the argument of this motion; but whether they have or not, it is clear they were all known,- or might have been known, to Mr. Bushnell during his life, and after this lapse of time it is too late to introduce them as defenses to the action simply because the substituted defendants did not know until their counsel discovered that which was known, or might have been known, to Mr. Bushnell during his life-time.

The matter sought to be set up in the fourth paragraph of the proposed supplemental answer should not be allowed to be interposed, for the presumption of payment therein referred to can scarcely be indulged, in the face of the fact that this action has been pending for 26 years; but, further than t-hat, it seems that the general term of this court has already passed upon that question, and it has been disposed of by its decision.²

Concerning the discharge in bankruptcy, which is sought to be set up, I think that should not be allowed. If I understand the facts correctly, the receiver’s action was brought in 1863. The national bankrupt act was not passed until 1867. The receiver’s action was virtually to set aside a transfer of the property claimed to be fraudulent as against the judgment creditor represented by the receiver, and by the filing of his bill he acquired an equitable lien against the property, and the subsequent discharge of the judgment debtor does not, in ■ my opinion, defeat that equitable lien, or prevent the fraudulent transferee being held responsible for that .property transferred, or its value.

The allegation as to the transfer of notes and assets in 1863, contained in ' the fourth subdivision of the fourth paragraph, ought not to be allowed to be pleaded now, after a lapse of a quarter of a century, and in view of the gross neglect of Mr. Bushnell in setting it up during his life-time, for he did not die until June, 1887, 24 years after this transaction is said to have occurred.

The only remaining matter sought to be placed before the court by this supplemental answer is that there is no one in being interested in the receivership, or entitled to receive any moneys thereunder, except the receiver himself. But this is fully disposed of by the affidavits of Mr. Nelson Merrill, the attorney for the plaintiff, and of Mr. Holbrook. On the whole case I am decidedly of the opinion that this application is without merit, and that the ends of justice would not be subserved by granting it in any of its branches. Motion denied, with $10 costs.

NOTE.

In January, 1888, the executors, as substituted defendants, made a motion in Kings county to vacate the order appointing plaintiff as receiver on account of irregularities in his appointment. This motion was denied, and on appeal to the general term of the supreme court for the second department the following opinion was filed: “Dykman, J. This is an appeal from an order of the county judge of Kings county denying a motion .to vacate an order appointing a receiver in proceedings supplementary to execution, and remove his bond from the files of the county clerk, and vacate all his proceedings. The motion was made by the judgment debtor, and the order which he. desires to annul was made in October, 1862. After his appointment, and in the year 1863, the receiver commenced an action against the judgment debtor and Ezra L. Bushnell for the recovery of property alleged to have been transferred by the judgment debtor in fraud of creditors, which has been tried before a referee, who found all the facts in favor of the receiver, and, among other things, found in favor of his appointment,— that is, that he was regularly appointed as such receiver. Our conclusion also is that the appointment of the receiver was regular, and that the motion for his removal was properly denied. The order appealed from should be affirmed, with $10 costs and disbursements. ”

1 See note at end of case.

2 See 4 N. Y. Supp. 64.