Case ID: nys_31/html/0627-01.html
Source: Caselaw Access Project
Author: {"author": "BROWN, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

NORCROSS v. HOLLINGSWORTH.
    (Supreme Court, General Term, Second Department
    December 10, 1894.)
    1. Supplementary Proceedings—Receivers—Right to Sue.
    A receiver in supplementary proceedings cannot sue on a bond given by an underslierifiC to the judgment debtor as sheriff, unless the sheriff (the judgment debtor) has made good the undersheriff’s default, as the cause of action belongs to the debtor as sheriff, and not as an individual, and the receiver represents the creditors.
    2. Same—Property Acquired after Appointment.
    The receiver takes no title to property acquired after his appointment.
    Appeal from circuit court, Kings county.
    Action by John E. Norcross, receiver of Lewis B. Stegman, substituted as plaintiff in place of said Stegman, by whom the action was originally brought, against Henry S. Hollingsworth, to recover money alleged to be due on a bond. From a judgment entered on a verdict in favor of plaintiff for $3,118.84 and costs, defendant appeals.
    Reversed.
    Argued before BROWN, P. J., and DYKMAN, J.
    Fernando Solinger, for appellant
    M. L. Towns, for respondent.
   BROWN, P. J.

The plaintiff was appointed receiver of the property" and effects of Lewis R. Stegman by an order of a judge of the city court of Brooklyn, dated April 15, 1884. At that date Stegman was sheriff of Kings county. Francis S. Hodgkinson had been duly appointed undersheriff by Stegman, and on the 5th day of January, 1882, the defendant and Hodgkinson executed and delivered to Stegman a bond in the penalty of $10,000, conditioned for the faithful discharge by Hodgkinson of the duties of undersheriff, and the payment and discharge by him of all liabilities incurred by said Stegman by and through any act of said Hodgkinson as such undersheriff. Subsequent to the appointment of the plaintiff as receiver, a judgment of foreclosure and sale was executed by Hodgkinson. The judgment directed the sale of certain real estate in Kings county by the sheriff, and that after payment of the amount due upon the mortgage, together with certain taxes and assessments and costs, he should deposit the surplus with the treasurer of Kings county within five days after receiving the same. Hodgkinson received the money on the sale of the real estate in June, 1885, and, after making the payments directed by the judgment, there remained a surplus of about $3,000, which, after demand, he failed to deposit with the county treasurer or pay over to the sheriff. This action was brought upon the bond given by Hodgkinson and the defendant to the sheriff, and the claim is for the surplus arising from the foreclosure sale.

At the close of the evidence the defendant moved to dismiss the complaint upon the grounds, - among others, that the plaintiff had no title to the cause of action. This objection, we think, was well taken, and is fatal to the judgment. There is no allegation in the complaint that the sheriff had paid the surplus to the county treasurer, nor was there any proof of that fact. Hodgkinson was bound to pay over the money to the sheriff upon his demand, but the sheriff’s right to receive the money was an official right, and not one that belonged to him as an individual. He. had not been compelled to pay over the surplus money; hence he had suffered no actual damage by reason of Hodgkinson’s defalcation. He was liable for Hodgkinson’s default, but such liability flowed from their official relation. It follows that the money sought to be recovered in this action was not Stegman’s property. While he had a right to receive it, his receipt of it would be as sheriff, and he would have been bound, immediately upon its receipt, to have deposited it with the county treasurer as directed by the foreclosure judgment. The plaintiff represents Stegman’s creditors, and he has title to such property as Stegman possessed individually at the date of the appointment. He had no title and no right to receive trust funds which Stegman was entitled to receive as sheriff. But if it could be shown that Stegman had made good Hodgkinson’s default, and had a right of action upon the bond in suit for damages sustained, which would belong to him individually, and would be applicable to the payment of his debts, the plaintiff could not recover upon the evidence now before us. The judgment of foreclosure under which the sale was made by Hodgkinson was granted nearly three months after plaintiff was appointed receiver, and the cause of action arising from the failure to comply with its direction as to the surplus money did not arise until June, 1885. The receiver took title to such property as Stegman possessed or was entitled to at the date of the order appointing him. He takes no title to after-acquired property, and cannot, therefore, claim or enforce any rights which became vested in the debtor subsequent to the order appointing him receiver. Dubois v. Cassidy, 75 N. Y. 298; Campbell v. Genet, 2 Hilt. 290; Thorn v. Fellows, 5 Wkly. Dig. 473; Hasten v. Amerman, 51 Hun, 244, 4 N. Y. Supp. 681; Columbian Inst, v. Cregan, 11 Civ. Proc. R. 87. The claim asserted in this suit was property Stegman acquired after plaintiff’s appointment, and which consequently never vested in him as receiver. For this reason the motion to dismiss the complaint should have been granted. The judgment must be reversed, and a new trial granted; costs to abide the event.