Case ID: ad_146/html/0567-01.html
Source: Caselaw Access Project
Author: {"author": "Hirschberg, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Spencer Lathrop, Respondent, v. Twelfth Ward Bank and Eugene C. Gilroy, Appellants, Impleaded with Hickok Printing Company, Defendant.
    Second Department,
    October 20, 1911.
    Conversion — debtor and creditor — supplementary proceedings — receiver — sale of debtor’s property covered by chattel mortgage — liability of one receiving proceeds — limitation of action.
    A receiver in supplementary proceedings who without leave of court replevies, seizes and sells, property of the judgment debtor which is covered by a-chattel mortgage duly filed is guilty of conversion.
    The judgment creditor which has received and retains the proceeds of the sale of such property is liable to the holder of the chattel mortgage for the damages sustained by him.
    
      It seems, that this would be so even if. the receiver had acted under authority of the court.
    But any action against the receiver individually to recover damages for the taking of the property is barred (Code Civ. Proe. § 383,'subd. 4) after three years.
    Appeal by the defendants, Twelfth Ward Bank and another, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Westchester on the 13th day of June, 1910, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 8th day of June, 1910, denying the said defendants’ motion for a new trial made upon the minutes.
    
      L. M. Berkeley, for the appellant Twelfth Ward Bank.
    
      
      Allan C. Rowe [Sumner Bowman with him on the brief], for the appellant Eugene C. Gilroy.
    
      Hugh M. Hewson, for the respondent.
   Hirschberg, J.:

In the month of July, 1902, the defendant Hickok Printing Company executed a chattel mortgage on certain personal property belonging to it to secure the sum of $3,605.51 and interest.. The mortgage was duly filed on the day of its date and was thereafter assigned to the plaintiff by the mortgagees for value. It provided that until default the chattels covered by it should remain, in the possession of the. mortgagor. In June, 1902,. the appellant Eugene C." Gilroy was duly appointed receiver in supplementary proceedings on a judgment recovered by the appellant the Twelfth. Ward Bank against the Hickok Printing Company, and as such receiver he thereafter commenced an action against said company, in which action he replevied, seized and sold the mortgaged chattels and paid over to the bank the net proceeds of the sale. The sale was made on October 4, 1902. No notice of these proceedings was given to the plaintiff, nor does.it appear that he had any knowledge of it until shortly before the commencement of this action. The proceeds of the sale remain in the possession of the bank, and the mortgaged chattels have been and remain effectually dispersed to the undoubted pecuniary injury of the plaintiff as mortgage assignee.

The bank, as appellant, claims immunity, from liability on the ground that as the receiver was an officer of the court, and acted as such in the seizure and sale, it is not liable for the consequences of his act. It does not appear, however, that in the replevy and sale the receiver. acted under any authority given him by the court, and it would seem that, even*had he done so, the fact that the bank has received and retains the proceeds of the sale would be sufficient to impose liability on it. The act of the receiver was clearly tortious, and the case of Hamill v. Gillespie (48 N. Y. 556), relied on by counsel for the bank, is not applicable, .as. in that case the sale was clearly lawful.

The action, however, as against the appellant Gilroy was barred by the provision of section 383 of the Code of Civil Procedure, which provides (subd. 4) that an action against a receiver to recover damages for taking, detaining or injuring personal property by him, or the person whom he represents, shall be instituted within three years. The present action was commenced in September, 1908, and the defense was duly pleaded and overruled upon the trial. Although the action is brought against the appellant Gilroy individually, he is clearly entitled to the benefit of the limitation. This was held in the case of an executor sued individually for a wrong in Matter of Van Slooten v. Dodge (145 N. Y. 327), followed by this court in Reimers v. Schmitt (68 App. Div. 299.) The same construction has been given to subdivision 1 of section 385 of the Code of Civil Procedure requiring an action against a sheriff for liability incurred in his official capacity, or for the omission of an official duty, to be instituted within one year. (See Cumming v. Brown, 43 N. Y. 514; and, to the same effect, Murphy v. Callan, 69 App. Div. 413; Conley v. Carney, 126 id. 337.)

The judgment and order should be affirmed as to the appellant Twelfth Ward Bank, and reversed as to the appellant Gilroy.

Jenks, P. J., Thomas, Carr and Rich, JJ., concurred.

Judgment and order affirmed, with costs, as to the appellant Twelfth Ward Bank, and reversed and new trial granted, costs to abide the event, as to the appellant Gilroy.