142 N.Y.S. 972 | N.Y. App. Div. | 1913
In an action duly brought in the City Court of the City of New York, the appellant recovered a judgment against the judgment debtor, Jacob Cram, for the sum of $911.93, on the 25th day of January, 1906, and the judgment roll was filed and the judgment docketed in the office of the clerk of the City Court, and a transcript of the judgment was filed and the judgment was docketed in the office of the clerk of the county of New York on the 28th of February, 1906, and an execution was duly issued on the judgment and returned wholly unsatisfied. Thereafter, and on February 10, 1913, on due proof of these facts and of the further fact that one Norman S. Walker, Jr., who resided and had a place for the regular transaction of business in person in the county of New York, had property of the judgment debtor, exceeding the sum of $10 in value, and was indebted to him in an amount exceeding that sum, and that no previous application “ for this order ” had been made, an order was duly made by one of the justices of the City Court, duly entitled as
The respondent, on his application to vacate the order for his examination, showed that on the 9th day of March, 1907, in a proceeding supplementary to execution theretofore instituted against him, as a third person, by one William S. Webb, a cousin of the judgment debtor, who had theretofore and on the 17th day of April, 1903, recovered a judgment against him by default for $9,449.58, one Scoble, who was a clerk in the office of the attorney for the judgment debtor, was appointed by a justice of the Supreme Court receiver of “all the debts, property, equitable interest, rights and things in action of the said Jacob Cram,” the judgment debtor; that the receiver duly qualified, and that on March fifteenth thereafter an order was duly made by the same justice directing the respondent forthwith to pay over and transfer and convey to the receiver all property in his possession or under his control belonging to the judgment debtor, and any property which might thereafter, until the further order of the court, “come into his possession or under his control belonging to said judgment debtor; ” that in 1892 the judgment debtor and his wife conveyed certain real estate and transferred certain bonds to the respondent by a deed of trust, reserving to the judgment debtor the income therefrom during life; that this is the only property in the possession of the respondent in which the judgment debtor is interested, or on account of which the respondent is indebted to him, and that pursuant to said order the respondent has duly accounted to the receiver for the income of said property from time to time, and that at the time of making said motion there remained in his hands as income of said property only “a
It was shown by affidavit in opposition to the motion to vacate the order, among other things, that prior to the appointment of the receiver in the supplementary proceeding instituted on the Webb judgment, that judgment was assigned to one Lockwood, who was associated in business with the attorney for the judgment debtor; that the appointment of the receiver was consented to by the judgment debtor, and procured by his attorney; that the income for which the respondent has accounted to the receiver has been turned over by the receiver to the attorney for the judgment debtor for the use and benefit of his client; that the receiver was collusively appointed for the protection of the judgment debtor against his creditors; that on the examination of the respondent on the return day of the order, the latter stated that he was unable to give the details with respect to the disposition of the trust property and the income thereof without using his records, and that he promised to exhibit the records to the attorney for the appellant during the adjournment, but subsequently refused so to do.
An opinion was written at the Special Term of the City Court on denying the motion, and at the Appellate Term (80 Mise. Rep. 389) on reversing the order. No reference is contained in either of the orders or opinions to the point, taken in the affidavit upon which the motion to vacate the order was made, that the appellant instituted a third party proceeding against the respondent on this judgment in 1906, and examined him therein. It is evident that the learned justice of the City Court and the learned justices of the Appellate Term were of opinion that notwithstanding the failure of the judgment creditor to disclose the fact that he had had a former examination of the respondent and to show that the former proceeding
The learned justices of the Appellate Term appear to have been misled by a dictum of this court in Matter of Steinmann v. Conlon (150 App. Div. 708), based upon a decision made by the Second Department in Sorrentino v. Langlois (144 id. 271). In Matter of Steinmann v. Conlon (supra) a witness who had been subpoenaed to testify in a proceeding supplementary to execution, moved to vacate the subpoena, and his motion having been denied he appealed to this court, where the order was reversed and the motion was granted upon the ground that it did not appear that there was any proceeding pending requiring the judgment debtor to appear and be examined, and that sufficient facts were not stated to enable the court to determine whether the subpoena was issued in a proceeding entitled as a supplementary proceeding against a third party, or that there was any basis for requiring the witness to appear, and be examined concerning property of the judgment debtor held by him or by a third party. It was observed in the opinion that a receiver of the property of the judgment debtor had been appointed in proceedings supplementary to execution instituted'by another judgment creditor, and that title to all the personal property of the judgment debtor in whomsoever’s hands it might be vested in such receiver on his appointment and qualification, and that, therefore, such property in the hands of a third person could only be reduced to possession by the receiver, and that consequently the examination of the appellant as a witness in a proceeding-under a third party order would be futile. The case of Moore v. Taylor (40 Hun, 56) was cited as authority for the proposition that the personal property of the judgment debtor vested
The institution of a supplementary proceeding by each creditor is necessary to the protection of his rights, for the reason that a receiver in supplementary proceedings, unlike a general receiver, is receiver only for the benefit of the judgment creditor at whose instance he is appointed, and those to whose separate supplementary proceedings the receivership is extended; and on the extension of a receivership the judgment creditor who instituted the proceeding to which it is extended has the same rights as if another receiver had been appointed in his proceeding. (Code Civ. Proc. § 2466; Stephens v. Meriden Britannia Co., supra; 2 Fiero Spec. Proc. [3d ed.] 1855; 3 Rumsey Pr. [2d ed.] 602.)
Aside from the precedents on this point, it seems to me that by the express provisions of the Code of Civil Procedure relating to proceedings supplementary to execution, it is contemplated that each proceeding, whether it be' one against the judgment debtor after the issuance and before the return of the execution, or one against him after the return of the execution, or one against a third party, is separate and distinct, and that the only manner in which property acquired by the judgment debtor subsequently to the original appointment of a receiver can be reached is by an extension of the receivership, which may be done at the instance of another judgment creditor, and for his benefit; and the fact that there has been an examination of the judgment debtor by one judgment creditor does not affect the right of every other judgment creditor to have at least one examination of the judgment debtor, or of a third party, as matter of right. (Code Civ. Proc. §§ 2432, 2433, 2447, 2464, 2465,. 2466, 2468, 2469; 3 Rumsey Pr. [2d ed.] 546; Canavan v. Me Andrew, supra; Grocers’ Bank v. Bayaud, supra; Ballings v. Pitman, supra;
It follows that the determination of tho Appellate Term should be reversed, with ten dollars costs and disbursements in this court and in the Appellate Term, and order of the City Court affirmed.
Ingraham, P. J., McLaughlin and Clarke, JJ., concurred; Scott, J., concurred hi result.
Determination reversed, with ten dollars costs and disbursements, and order of City Court affirmed, with ten dollars costs and disbursements in the Appellate Term.