Case ID: abb-pr-ns_14/html/0314-01.html
Source: Caselaw Access Project
Author: {"author": "\n      By the Court.—Freedman, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

O’BRIEN against THE MECHANICS’ AND TRADERS’ FIRE INSURANCE COMPANY.
    
      New York Superior Court,
    
    
      General Term; May, 1873.
    .Attachment.—Manner of Lett. — Sheriff's Action. — Short Limitation.
    Under section 335 of the Code of Procedure, an attachment of a debt due from a third person to the defendant in the attachment, must be by notice, which so particularly describes the property or debt that the party served is enabled to identify it; and a notice in general terms is void.
    
    The case óf Olark ®. Goodrich, 41 S. T, 310; 44 Sow. Pr., 336, explained.
    
      James O’Brien, sheriff of New York, sued the defendants on a policy of insurance they had issued in favor of E. S. Candler, Jr., upon Ms property, wMch was subsequently destroyed by fire.
    
      The plaintiff claimed to recover Candler’s money by virtue of certain attachments which he held, issued at the suit of various creditors of Gaudier, and of which attachments he had given notice to the insuranee company for the purpose of binding the fund in their hands. The notice of attachment which the sheriff gave the company was in general terms, purporting to cover all the property, money, bank notes, books of account, vouchers, debts, credits, and effects of Candler in .their possession.
    At the trial it appeared that within a month after the loss, Candler furnished preliminary proofs to the company, and was required by them to furnish more particular proofs. This he did in part, but alleged that he was unable to furnish the remainder required. The notice of attachment was given to the defendants after this, and before the expiration of the six months limited by the policy.
    The sheriff brought this action in June, 1869, to collect the insurance, under the provisions of sections 232, and 237, subdivision 4, of the code of procedure. The answer alleged that the loss was fraudulently overstated in the preliminary proofs, and that the action was not brought within six months after the loss, as required by the policy.
    Defendant’s counsel moved to dismiss the complaint on the following grounds :
    I. That the attachments had never been levied upon the property in question.
    II. That in the twelfth condition of the insurance it was expressly agreed, that no suits or actions against the company for the recovery of any claim by virtue of the policy, should be sustainable in any court of law or chancery, unless said suit should be commenced within six months after the loss occurred.
    III. That no right of action ever accrued to any body, inasmuch as the proofs of loss were never served in compliance with the ninth condition of the policy.
    The justice dismissed the complaint on the ground that the sheriff’s proceedings did not constitute a levy, and that the unadjusted claim of Candler against the company had not been attached, the notice served not sufficiently “ showing the property levied on” {Code, § 235).
    Plaintiff’s exceptions were ordered to be heard in ’ the first instance at the general term, with a stay in the action until decision thereon.
    
      William W. Badger and Livingston K. Miller, for the plaintiff.
    
      George W. Parsons, for the defendant.
    
      
       In Van Volkenburgh against Bates (New York Superior Court, Special Term, 1873), it was held:—
      1. That an action in aid of an attachment, brought to enforce choses in action upon which the attachment has been levied, must be brought in the name of the sheriff, or in the name of the debtor in the attachment.
      2. The provision of the Code, § 338, that actions may be prosecuted by the plaintiff in the attachment, do not authorize the plaintiff to prosecute them in his own name. The case of Skinner v. Stewart, 15 Abb. Pr., 391, qualified.
      3. The plaintiff in an attachment called on a third person, who held a draft belonging to the debtor in the attachment, and, upon the pretext that he wished to examine the draft, obtained possession of it, and then handed it to his companion, a deputy sheriff, who then first disclosed his official character, and served the attachment. Held, that the plaintiff could not maintain an action in equity to compel such third person to indorse the draft, so that it might be collected and applied to the attachment debt.
      Phillip Van Volkenburgh and others having issued an attachment against their debtor, obtained possession of a draft from Robert J. Bates, under circumstances stated in the opinion, and then brought this action to compel Bates to indorse the draft so that it might be collected and applied in payment of the debt for which the attachment was issued.
      Van Vobst, J.—The defendant insists that this action cannot be maintained by the plaintiffs in their own name; that the same should have been brought in the name of the sheriff. Mo such objection is specifically taken in the answer, but it may well be considered under the denial therein contained, “that, by reason of the matters in the complaint'set forth, the plaintiffs are entitled to the judgment in the complaint prayed for, or to any relief or judgment in the premises.” This is an averment substantially that the complaint does not state facts sufficient to constitute a cause of' action, and which objection may be raised on the trial,- and is not waived by an omission to demurer, although the defect appears on the face of the complaint {Code, § 148). This would include a case where the facts pleaded failed to show any legal right or claim in the plaintiffs to the cause of action or the relief asked for.
      The sheriff, to' whom a warrant of attachment is delivered, is authorized and commanded, “subject to the direction of the court or judge, ” to collect and receive into his possession all debts, credits, and effects of the defendant. He may also take such legal proceedings, either in his own name or in the name 'of the defendant, as may be necessary for that purpose, and discontinue the same at such times and on such terms as the court or judge may direct '(Qode, § 232). It is further provided by section 238 that the actions authorized to be brought by the sheriff may be prosecuted by the plaintiff, or under his direction, upon the delivery by him to the sheriff of an undertaking executed by two sufficient sureties, to the effect that the plaintiff will indemnify the sheriff from all damages, costs and expenses on account thereof not exceeding two hundred and fifty dollars in any one action. That the plaintiff is authorized to prosecute actions does not necessarily allow him to bring them in his own name. The prosecution is the carrying on of a legal suit or proceeding for redress or punishment. An action or proceeding may be prosecuted by one person in the name of another. There are various proceedings and prosecutions authorized to be instituted by individuals which must be in the name of the people. In addition, section 238 provides that there may be prosecuted by the plaintiff, or under his direction, “the actions herein authorized to be brought by the sheriff.” Mow, what are those actions which the sheriff may bring ? “The sheriff may also take such legal proceedings, either in his own name or the name of the defendant, as may be necessary ” (§ 232). That is, the plaintiff, upon giving security to the sheriff, may bring the actions the sheriff was authorized to bring, either in the name of the sheriff, or the name of defendant.
      This construction best harmonizes with the design of the law, that actions should be brought in the name of the party in whom the legal title rests, and relieves of all uncertainty as to what disposition is to be made, and by whom made, of the proceeds of actions, when collected, and avoids confusion or conflict in cases where there are several attachments in the sheriff’s hands in favor of different creditors against the same defendant. The sheriff, under the attachment, has the legal claim to the property in question, to be applied by him to the satisfaction of the judgment when recovered. But should the sheriff for any cause be unwilling to -bring an action, the plaintiff may prosecute it in the name of the sheriff, or of the defendant, upon indemnifying the sheriff against costs and expenses. When a sentence is doubtful, its meaning is to be gathered from the context, or discovered by analogy or fair induction. Words are always understood as having regard to the subject matter. That interpretation which leads to the more complete effects which the legislator had in view is preferable to another (Legal Hermeneutics, by Dr. Francis Lieber, page 167, edition of 1839). The legislature could not have intended to give the plaintiff the exclusive control of the suit, and of its proceeds, with liberty to compromise or discontinue the same at his option, to the prejudice, perhaps, of other attaching creditors, which incidents could not attend if the suit was instituted in the name of the sheriff. For it is not to be overlooked that if the action be brought by the sheriff, in his name or that of the defendant, the same could not be discontinued by him except at such times and on such terms as the court or judge may direct; which latter conditions do not apply if it bo held that the plaintiff may sue in his own name.
      It is true that it was held in Skinner v. Stuart, 15 Abb. Pr., 391, decided at a general term of the supreme court in 1863, Clerks, J., that the plaintiff, upon giving the undertaking to the sheriff provided for in section 338, might prosecute in his own name any action which the sheriff could have prosecuted. But in the Mechanics’ and Traders’ Bank v. Dakin, 50 Barb., 588, the same court decided in the year 1867, that the prosecution must be carried on in the name of the sheriff, through whom the plaintiff must act. Two of the judges who concurred in the decision in Skinner ». Stuart, including the learned judge who delivered the opinion, were also members of the court, and participated in the latter case of the Mechanics’ and Traders’ Bank v. Dakin. And it is not an unreasonable assumption that the latter is the more matured and better considered judgment of the court. The Commissioners, Montgomery H. Throop and others, appointed to revise the statutes of Hew York, pursuant to chapter 33 of the Laws of 1870, in their draft submitted in 1873, entitled part III., chapters I.-XIY., sections 663, 664, 688, 689, have carefully prepared provisions clearing this subject of all doubt. Provision is made, by leave of the court first had, for the bringing of actions, in the case of attachments against property, in the name of the plaintiff and sheriff jointly, the sheriff, however, to receive -the proceeds of any such action. Precautions are also taken against collusive actions to the prejudice of other attaching creditors, and both the right of the defendant and junior attaching creditors are adequately protected.
      But there are other grounds which I think fatal to the plaintiff’s right of recovery. The judgment demanded in the complaint is that the defendant be required to indorse the draft, the subject of the attachment, so that the sheriff may be enabled to collect the money thereon, and if the moneys cannot be collected, then for judgment that the defendant pay to the sheriff the amount thereof. Although the draft is drawn payable to the defendant’s order, yet he has no interest therein, and is under no legal obligation to indorse it, or incur any liability by such indorsement. How it may well be doubted whether this be such an action as the sheriff himself is authorized to bring under section 232. His right to institute legal proceedings under that section is subject to the direction of the court, which proceedings are limited to collect and receive into his possession all debts, credits, and effects of the defendant. In Thurber v. Blanck, in the court of appeals, it was decided that the authority conferred by section 382 was designed to enable the sheriff to recover possession of the debts and effects of the debtor, and to institute such actions only as might be commenced in the name of the defendant. This is neither an action to collect nor to recover the possession of the draft in question, but to compel its indorsement by a person evidently under no duty to do so. The draft is already in the sheriff’s possession, and obtained under circumstances which do not entitle him to the extraordinary aid of a court of equity to gain further advantage through its enforced indorsement by the person from whom it was artfully obtained, so as to be attached. The. draft had been received by the defendant from Oomstock, his correspondent, for a specific purpose and under definite .instructions. Defendant was the mere agent of Comstock to carry out the purpose for which the draft was forwarded to him. The purpose was lawful. The plaintiff knew the purpose for which the draft had been forwarded to defendant, and that he was under instructions limiting the conditions upon which he should deliver over the draft. They knew that the conditions had not been complied with. And yet one of the plaintiffs, with such knowledge, called upon the defendant with a deputy sheriff, but concealing the fact that his companion was such deputy, and upon the pretense that he wished to examine the draft, asked to see it. But as soon as he got the draft into his possession he at once passed it over to his companion, who then first disclosed his official character by taking from his pocket and serving upon the defendant a copy of the warrant of attachment, and went away with the draft in his possession, and which he has ever since held, it being unavailable without the defendant’s indorsement. Such, briefly, is the manner in which the sheriff became possessed of the draft, through the agency of the plaintiff, and which they demand, in this action, the defendant shall be ordered to indorse.
      This is an equitable action, and I am persuaded that in the exercise of its equitable powers this court, under the circumstances above stated, is not called upon to adjudge, in substance, that the defendant should disregard the instructions of the person from whom h'e received the instrument, orbe compelled to incur any further liability on the draft or to the person from whom he received it. FTor should, this court, by granting the prayer of the complainant, give the plaintiffs other and enlarged rights and remedies in addition to those acquired by obtaining the draft, and levying upon it under the attachment, in the manner above mentioned.
      The complaint should be dismissed with costs.
      In Thurber v. Blanck, 50 N. Y. 80, the plaintiff had attached a bond and mortgage which he charged his debtor had assigned in fraud of creditors; and he then brought his action to set aside the assignment, and to subject the mortgage to the lien of the attachment, and apply its proceeds to his demand.-
      The court held that the action would not lie. The remedy to enforce the attachment must be pursued according to the provisions of the Code alone, and the attachment would only sustain an action to enforce payment of the mortgage. If that would not lie on account of the fraudulent assignment whereby the mortgage had not been subjected to the lien of the attachment, the case was brought within the general rule, that a creditor’s suit will not lie until the creditor has obtained judgment.
      Whether, on the sheriff’s death pending an action brought by him, the attaching creditor can be substituted as tne plaintiff, has been questioned. In Orser v. The Glenville Woolen Co., 11 Abb. Pr. N. S., 85, it was held that he could not; that the proper party was the successor in office of the sheriff. On appeal to the court of appeals, after such substitution had been made, that court affirmed the order, on the ground that, under the circumstances, it was correct, while, however, they suggested that the substitution of the creditor might, in some cases at least, be more proper (O’Brien v. The Glenville Woolen Co., 50 N. Y., 136).
    
   By the Court.—Freedman, J.

The learned judge who presided at the trial dismissed the complaint for the reason that the claim of Candler against the defendant upon the policy in question had not been attached by the sheriff, and that consequently the plaintiff had no such title to the property as is necessary for the maintenance of the action.

The manner in which attachments under the Code are to be executed so as to bind property of which manual delivery cannot be made, is prescribed by section 235. They are to be executed by leaving a certified copy of the warrant of attachment with the person or corporation holding such property, “with a notice showing the property levied upon.” Section 236 furnishes the sheriff with the means of obtaining a disclosure of all the particulars necessary to enable him to describe the property intended to be levied upon with due particularity. He may apply to the person holding the property for a certificate designating the amount and description of any property so held. In case the certificate be"refused, it may be compelled. .

In Kuhlman v. Orser (5 Duer, 242), this court expressly held, as one of the grounds upon which judgment absolute was ordered for the plaintiff upon the verdict, that the requirement of said section 235 can only be satisfied by a notice which so particularly describes the property that the holder is thereby enabled to identify it, and that a notice general in its terms and containing no specification of the particular property meant to be levied on, is insufficient and void.

This decision has since been followed by this court in Wilson v. Duncan (11 Abb. Pr., 3), and has been expressly approved by the court of appeals in Clarke v. Goodridge (41 N. Y., 210). It is true that in another report of the last-named case contained in 44 How. Pr., 226, an attempt has been made to show that the of Chief Justice Hunt the point now under consideration, was not concurred in by a majority of the court and was not necessary to the decision of that case. But the printed cases in Clarke v. Goodridge and Drake v. Goodridge, which were handed up by defendant’s counsel, and a critical examination of the opinions published in 44 How. Pr., in the light which the printed records throw upon them, decidedly show, that although there were two motions in these cases, which, may have been argued , together in the court of. appeals, they had nevertheless been disposed of originally by two different'judges of the supreme court, and that they involved essentially different questions, which were ultimately disposed of by the court of appeals, as follows:

In the one case the order was reversed, for the reason stated by Chief Justice Hunt, and concurred in by all the judges except Daniels and James, that the notice served by the sheriff upon the National Bank of the Republic, did not specify sufficiently the property intended to be levied on, and did not refer to the interest of the debtor in such property with reasonable certainty.

In the other case the order was reversed for the reasons stated in the opinions of Grover and Lott, JJ., namely, that it did not appear that the sheriff had at any time made an attempt in any way to serve the attachment, while it was in his hands, upon the debt due from Yexhuven & Co. to Goodridge; that consequently the attachment never had been a lien on the fund, and that upon its return the sheriff’s power under it had ceased. Mr. Justice Geo ver was, therefore, entirely correct in saying (44 How. Pr., 229), that the sufficiency of the notice served by the sheriff upon the National Bank of the Republic in the first case above referred to, had nothing tó 'do with the second case.

The doctrine first laid down in Kuhlman v. Orser (supra), represents, therefore, not only the settled law of this court, but the law of this ’ State as settled by the court of appeals; and from this it follows that the notices served in the case at bar,—which purported to cover generally all the property, real and personal, money, bank notes, books of account, and vouchers and papers relating thereto, and the debts, credits and effects of Candler in the possession of or under the control of the defendant,—and which were not followed up by the procurement of a certificate and the returning of an inventory, were wholly insufficient to work a levy upon Candler’s claim under the policy in question.

This being so, the sheriff is not in a position to maintain this action, and the defect could not be cured by proof, that subsequent to its commencement, but long after the limitation of the six months prescribed by the policy for its commencement had attached, he made a new levy accompanied by a proper notice. Such a contract of limitation is valid, and will be enforced by the courts (Roach v. New York & Erie Ins. Co., 30 N. Y., 546, and Mayor, &c., of N. Y. v. Hamilton Fire Ins. Co., 39 N. Y., 45). Hor could the defect be obviated by mere conversations between the deputy sheriff and defendant’s officers. The remedy given by section 235 is not merely cumulative, but is the only remedy known to the law in the cases there mentioned, and must be strictly pursued.

Plaintiff’s exceptions must be overruled, and judgment absolute, dismissing the complaint, ordered for the defendant, with costs.

Babboub, Ch. J., and Sedgwick, J., concurred.

Judgment accordingly.