Case ID: ny-st-rep_9/html/0050-01.html
Source: Caselaw Access Project
Author: {"author": "Brady, J", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles E. Lydecker, Receiver, etc., App’lt, v. Eliza Smith et al., Resp’ts.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed May 13, 1887.)
    
    Fraudulent conveyances—Action to set aside—Who can maintain THE SAME.
    A receiver appointed to collect the'expenses and deficiency occasioned by the purchaser at a foreclosure sale, omitting to complete the purchase, may maintain an action to set aside a conveyance as fraudulent against the delinquent purchaser.
    Appeal from judgment of the special term dismissing; complaint.
    
      A. A. Redfield, for app’lt; Abner G. Thomas and E. Terry, for resp’ts.
   Brady, J

The plaintiff was appointed the receiver of the property of Emma Birney, an alleged judgment-debtor and this action was brought by him to set aside a conveyance which it was alleged was fraudulently made by her.

The proceedings supplementary against her were founded upon an order directing her to pay the expenses and deficiency occasioned by her omission to complete her purchase at a sale in a foreclosure suit and which might be shown by a resale of the mortgaged premises.

The direction to resell was duly made, although the order confirming the referee’s report of the second sale appears to have been made ex parte. In that it was directed that execution might issue for the collection of the sum pronounced to be payable by Mrs. Birney on account of her failure to complete her purchase.

The record does not show that any appeal was taken by Mrs. Birney from the order appointing the receiver or that any objection was urged against proceedings supplementary founded upon the absence of any judgment warranting them.

The objection urged successfully upon the trial herein was that there was no judgment existing against Mrs. Birney inasmuch as she was not a party to the foreclosure' action and the order made requiring her to pay the defi ciency mentioned was a mandate only, to be enforced as such and not a judgment eo nomine. It was not, it was said, rendered in an action against her commenced by summons and was not based upon pleadings. It was a continuation of the foreclosure suit only and as to her as a purchaser, although by becoming which she submitted herself to the jurisdiction of the court. Requa v. Rea, 2 Paige, 339; Miller v. Colyer, 36 Barb., 250.

The power of the court to order a resale and to direct the payment of any deficiency is conceded. It is not questioned either that an execution may issue to enforce the payment commanded but there, if the theory of the defendants counsel be accepted the remedy ceases. Where an execution may issue no attachment to punish for contempt in not paying money can be used Code section 14. Myers v. Becker, 95 N. Y., 493.

And it must follow that if in contemplation of the execution a conveyance be made with a fraudulent intent, no action can be maintained to invalidate it inasmuch as there is no judgment existing based upon pleadings and the usual ceremonials to that end. This is supposed to be an erroneous view of the subject. The order of the court made in the foreclosure case arose out of a transaction with the court and not with the plaintiff therein. Muller v. Colyer, (supra), and the only issue that could arise would be as to the difference in amount between what was to be paid on the first and what was to be paid on the second sale with the additional expenses.

This was a matter of figures easily ascertained on the coming in of the referee’s report and was herein determined within objection, and indeed so far as the record is concerned, without dispute. There was no necessity for pleadings in form or for a summons, because Mrs. Birney was already under the jurisdiction of the court in the action, and substantially consented to the order of re-sale by making no opposition. The plaintiff herein is still the quasi officer of the court in that case, having been appointed to collect its judgment which could not be enforced by execution alone, and invested with all the power possessed by receivers kindred to himself, at least as long as the order appointing him remains undisturbed. The order directing Mrs. Birney to pay the sum named should be regarded for the purposes of its collection as a judgment in all respects. It lacks nothing of the essential requisites of such formula. She subjected herself to the jurisdiction of the court, purchased under its decree—violated her contract thereby made—was cited to answer, submitted to the citation and was duly ordered to pay a sum in order to keep her faith with the court or its decree.

For these reasons there should be a new trial. It is not deemed necessary to consider in detail the objections to forms and not substance urged on the appeal inasmuch as they were of no controlling influence in the court below, in any respect the conclusion arrived at being predicate of the finding that no judgment had been entered and, inasmuch also as independently of that they are of no sufficient value considered either singly or grouped together to interfere with the views herein expressed or to sustain the judgment.

Daniels, J concurs.