Case ID: abb-pr-ns_11/html/0078-01.html
Source: Caselaw Access Project
Author: {"author": "Sutherland, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

ANDREWS against THE GLENVILLE WOOLEN COMPANY.
    
      Supreme Court, First District;
    
    
      Special Term, January, 1869.
    Appointment of Special Receiver.—Notice to Judgment Debtor.—-Action by Receiver. —Duty of Sheriff.—Rights of Attaching Creditors.
    In supplementary proceedings under the Code of Procedure, a receiver cannot be appointed of particular debts, or of a specified part or articles of the debtor’s property.
    A receiver cannot be appointed in supplementary proceedings under section 298 of the Code, without notice to the judgment debtor.
    Where debts due the defendant have been attached, the proper persons to bring an action for the collection of such debts are the sheriff to whom the attachment was issued, or the attaching creditors, and not a receiver appointed in supplementary proceedings in the suit in which the attachment was issued.
    Motion to dismiss the complaint.
    James W. Anderson, as receiver, brought this action against the Glenville Woolen Co., Joseph Ripley, and Alexander J. Cameron. Ralph H. Isham and John Orser, sheriff of New York county, brought a cross action against Andrews, the receiver, and Firmin Cousinery and William Craig, on whose motion and in whose suit Andrews had been appointed receiver.
    The facts of the case are as follows: The Glenville Woolen Co., a Connecticut corporation, on October 15, 1855, brought two actions in the superior court of the city of New York, to recover subscriptions alleged to be due it from Ripley and Cameron. In December, 1855, while these suits were still pending, attachments against the property of the company were issued out of this court, and delivered to John Orser, then sheriff of New York county, in three actions commenced against it,. by Whittal & Pendleton, by R. H. & J. G. Isham, and by Cousinery & Craig, respectively, and notices of these attachments were duly served on Ripley and Cameron, for the purpose of attaching the debts due from them to the company.
    After these attachments had been issued, R. G. & Jv G. Isham, having given security to the sheriff under section 288 of the Code, caused the actions which had been commenced by the company in the superior court against Ripley and Cameron, to be prosecuted by the sheriff, Orser, in. the name of the company as nominal plaintiffs, but for the benefit of the attaching parties.
    Messrs. Cousinery & Craig obtained a judgment by service by publication in their action against the (Renville Woolen Co. on December 15, 1863, and supplementary proceedings having been had, James A. Andrews, the plaintiff in the first mentioned suit, by an order dated December 23, 1864, was appointed receiver of the effects of the company in the hands of Ripley and Cameron. Andrews, as receiver, then brought this suit against the (Renville Woolen Co., Ripley and Cameron, to restrain the collection of the judgments obtained in favor of the company, on the ground that their attachment (Cousinery & Craig’s) had been first served on Ripley and Cameron, and that they had thereby acquired a prior lien on the debts due the company.
    Thereupon Ralph Gf. Isham, as assignee of the rights of R. Gf. & J. Gf. Isham, brought a suit in the name of himself and John Orser, sheriff of the county of Hew York, against Andrews, and Cousinery & Craig, in which the circumstances of the case were set up, and it was sought to enjoin Andrews from what was claimed to be an unauthorized interference with the sheriff, in the due course of his duty as such, under the attachments in his hands.
    A motion was now made to dismiss the complaint.
    
      Lucien Birdseye, for plaintiff.
    
      Henry Whittaker, for defendant.
    I. The complaint is untenable. By the lodgment of the attachment, Orser (the sheriff’) was constituted, ipso facto, agent of Cousinery & Craig for the collection of the fund in question, such agency being irrevocable, save by withdrawal of their process from his hands, and an abandonment of all claims under it. Ho such withdrawal or abandonment is pretended.
    
      II. But Orser does not stand in the mere capacity of agent. He fills the higher position of an officer of the court, bound to act under its direction only (Code of Pro., § 232), for there is no pretense that Cousinery & Craig ever acquired any title to give him directions by giving security under the special power conferred by section 238.
    III. The duty which the sheriff owes is a duty to all attaching creditors, and cannot legitimately be interfered with by any of them save by means of a special order of the court, obtained on notice to all interested in its performance or by their mutual concurrence. The attaching creditors, as a body, are entitled to call on Orser to complete and he is bound to complete that duty, for the benefit not of any particular party or parties, but of all parties placing process in his hands, in due course of administration according to law (Code of Pro., §§ 227, 232, 235, 236, 237, 242, 243). The performance of that duty is not yet complete (Code of Pro., § 242).
    IY. The appointment of a receiver under section 298 is only authorized in a proceeding under section 292, to reach the property of the debtor generally, and on notice to the debtor himself. It is not authorized in a proceeding under section 294, to reach specific property for the exclusive benefit of a party. In such a case the proper remedy is a creditor’s bill, proceeding against the debtor as an absentee, if he cannot be served with a summons. The case is not provided for by the Code (Kemp v. Harding, 4 How. Pr., 178 ; Dorr v. Noxon, 5 Id., 29 ; Barker v. Johnson, 4 Abb. Pr., 435; see also Catlin v. Doughty, 12 How. Pr., 457.
    V. The Code confers no power to appoint a receiver of part of the debtor’s property; it only authorizes the appointment of one of the property of the debtor as a whole (Code of Pro., § 298). Nor does the Code authorize an appointment for the benefit of any individual debtor (Porter v. Williams, 9 N. Y. [5 Seld.] 142 ; Bostwick v. Beizer, 10 Abb. Pr., 197).
    The appointment of a receiver under section 298 is to be in the same manner and with the like authority, as if the appointment was made by the court according to section 244, and under that section notice to the judgment debtor is necessary. It is settled law that no proceeding for a receiver can be maintained under section 294, and that no title to sue passes to the appointee in such a proceeding. Barker v. Johnson, 4 Abb. Pr., 435, and other cases above cited.
   Sutherland, J.

As to the first of the above entitled actions (Andrews v. The Glenville Woolen Co.), I think it very clear that the plaintiff could not bring the .action, and on the pleadings and proofs, cannot maintain the action, as special receiver of the debts mentioned in the complaint, because: 1. His appointment as such special receiver must be deemed to have been unauthorized and void. Section 294 of the Code does not authorize the appointment of a receiver of the property or debt, which may be ascertained to belong to the judgment debtor, or to be owing to him. Section '297 does authorize the judge to order the property Or «debt to be applied towards the satisfaction of the judg-. ¡ment but does not authorize the appointment of a receiver. Section 298 does authorize the appointment of ¡a receiver of the property of the judgment debtor generally, but does not authorize the appointment of a receiver of a particular debt or debts, or of a certain specified portion or part, or articles of the debtor’s property. ■ This section expressly provides that only <one receivér of the judgment debtor’s property shall "be appointed ; and this provision and the power to appoint a special receiver of particular debts, or property .■ascertained or discovered under section 224 would seem to be inconsistent. The appointment of a special receiver under section 298 would seem to be somewhat inconsistent with the general purpose of the supplemental proceeding.

Moreover, Andrews, the plaintiff, was appointed receiver without notice to the judgment debtor ; and it would seem that a receiver cannot be appointed under section 298 without notice to the judgment debtor. The section provides, that the receiver is to be appointed “inthe same manner,” &c., as if the appointment was made by the court, according to section 244 (See Kemp v. Harding, 4 How. Pr., 178; Dorr v. Noxon, 5 Id., 29; Barker v. Johnson, 4 Abb. Pr., 435). Gibson v. Haggerty (37 N. Y., 555-558) only decides that property of the judgment debtor ascertained or discovered under section 294 may be applied by order of the judge towards the payment of the judgment, without notice to the judgment debtor, and without any supplementary proceedings against the judgment debtor. It does not decide that a receiver may be appointed of such property, under section 298, for the purpose of having the property so applied by a receiver, either with or without notice to the judgment debtor.

2. Concede that the judge has power under section 298 to appoint Andrews receiver of the two specified debts only, without notice to the judgment debtor, yet his complaint shows on its face that he ought not to sustain his action as such special receiver, for the complaint shows on its face that he, as such receiver, was not the proper person or party to bring an action to collect, or in aid of the collection of the debts, which had been attached in the action of Cousinery & Craig against the Connecticut corporation, and in which action the judgment had been obtained by service by publication. It is stated and claimed in the complaint that the attachment was duly and properly served and the debts attached, and the lien and the force of the attachment and of its service is insisted on. The complaint therefore shows that Orser, the then- sheriff of Hew York, who attached the debts under section 237 of the Code, or the attaching creditors under section 238, were the proper persons to collect the a'ttached debts or to bring an action in aid of their collection. It may be said that the complaint shows on its face that there was no occasion or excuse for appointing Andrews a special receiver for collecting the attached debts, or for the purpose of bringing this action for the purpose of aiding their collection. It may be said, I think, that the appointment of Andrews as special receiver to bring this action, and his claimed right to bring and maintain it as such special receiver,. are plainly shown by the complaint itself to be inconsistent with the claim and statement in the complaint, that the debts had been duly and properly attached.

3. It cannot be pretended that Andrews was appointed receiver to collect or preserve the debts pendente lite. The complaint does not show that there was any pending litigation, of which the debts were the subject within the meaning of the rule or principle allowing a receiver to be appointed pendente lite. The complaint in the action by Andrews as receiver must be dismissed on the grounds which have been stated, without adverting to any other question in the case.

And I think it follows, the complaint in that action being dismissed, on the grounds stated, that the complaint in the second above mentioned action (Isham v. Andrews) should also be dismissed.

I think, under the circumstances, that the complaints in both actions should be dismissed without costs.

Order accordingly. 
      
       It was subsequently held by the court of appeals that the fact of the appointment of a receiver, even if concededly valid, did not, without demand or other interference by him, or payment to him, constitute a defense to the action in the name of the company (Glenville Woolen Co. v. Ripley 43 N. Y., 206).
     
      
      Upon the rendering of this decision, an order was entered appointing O’Brien, the then sheriff, as plaintiff in the action. From this order the defendants appealed to the general term, where the order was affirmed, and the defendants then appealed to the court of appeals, where an order was made on March 28,1871, that the appeal stand over and he decided with the appeal upon the merits.