Case ID: ny-st-rep_10/html/0062-01.html
Source: Caselaw Access Project
Author: {"author": "Daniels, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Erastus S. Spencer, Receiver, etc., Resp’t, v. Harriet B. Berdell, App’lt.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed June 18, 1887.)
    
    1. Receiver—Title of, to real property—Filing of lis pendens— Rffect of—Right of the receiver to continue pending actions— Sections 756, Code Civ. Pro.
    On the appointment of a receiver, he takes title to the real property of the judgment debtor subject to whatever the title of the judgment debtor may be subject, and where that title has been previously subordinated to a preceding action by the filing of a Us pendens, the receiver acquires the title subject to the same incumbrance. Under section 756, Code Civil Procedure, the receiver is at liberty to permit pending actions to proceed in the name of the judgment debtor, notwithstanding his own appointment, or to apply to be substituted as plaintiff in the action in place of the debtor.
    
      8. Same—Pn-ras order appointing receiver—Effect of, as a CONVEYANCE.
    When the order appointing a receiver is filed, it operates as a conveyance or transfer of the real property of the judgment debtor to the receiver. It is in fact a conveyance by operation of law, and subjects the receiver to the proceedings in the pending action as much as though he had taken a deed from the judgment debtor. The filing of the order after the filing of a Us pendens, is within sections 1670,1671 of the Code of Civil Procedure, in substance a subsequently executed conveyance.
    Appeal from a judgment recovered on trial before the court and jury.
    
      Charles E. Rushmore, for app’lt; Philip L. Wilson, for resp’t.
   Daniels, J.

The plaintiff, as a receiver appointed in supplementary proceedings, brought recover the possession of premises situated on the easterly side of Broadway, near Forty-seventh street, in the city of New York. He was appointed as such receiver m the fall of 1876, and the defense made to the action consisted of the fact that the judgment debtor, Robert H Berdell, in 1875, brought an action to redeem this and other property from a deed made by him to Eliza W. Parkhurst, which in fact being a security, was no more than a mortgage. In that action the present defendant, by her answer, alleged herself to be the owner of the property by virtue of a conveyance executed to her by Eliza W. Parkhurst, with the assent of the judgment debtor, and that she thereby became the absolute owner of the property in dispute.

That action was tried before the court in the summer of 1883, and a decision was made followed by a judgment to the same effect, that the defendant Harriet B. Berdell became the absolute owner of this and other property by reason of the deed executed and delivered to her.

This judgment, as well as the judgment in another action brought by Eliza W. Parkhurst against Robert H. Berdell and his wife, were interposed upon the trial of the present action as defenses in bar of the plaintiff’s right to recover. The effect of thejudgment in the Case of Parkhurst v. Berdell does not require to be examined, and should not be held to be entitled to any effect against the plaintiff as receiver, inasmuch as he does not claim under Eliza W. Parkhurst, and was in no manner represented by her in that litigation. And it resulted in no proceeding between the two defendants themselves for which this receiver could be held to be in any respect responsible or by the result of which he could be affected.

But as to the action of Berdell against Eliza W. Parkhurst and Harriet B. Berdell, the case is entirely different. For there the title of the judgment debtor himself to this property was placed distinctly at issue, and it was held by the court upon what is to be presumed sufficient evidence to support the conclusion that Harriet B. Berdell, and not this judgment debtor, from whom the receiver derived his title, was the owner of this real estate. And if this decision is operative or binding upon the plaintiff, then this action cannot be maintained by him.

To prove it to be so it was shown that a notice of the pendency of the action of Berdell against Parkhurst and Berdell, together with the complaint, were filed in that action, on the 22d day of November, 1875, while the judgment in the action in which the plaintiff was appointed receiver was not recovered until the 2d of October, 1876, and the order appointing the receiver in the supplementary proceeding was made on the 24th of November of the same year. And it was from that time only, according to subdivision 1 of section 2468 of the Code of Civil Procedure, that he became vested with the real property of the judgment debtor. When the title was vested in him, it was subject to the action then pending concerning it in favor of the judgment debtor against Eliza W. Parkhurst and Plarriet B. Berdell, the latter being the defendant in this suit. At that time the plaintiff had the election to permit the action to proceed in the name of the judgment debtor notwithstanding his own appointment, or to apply to be substituted •as plaintiff in the action in the place of the debtor. This he was at liberty to do under section 121 of the Code of Procedure, and afterwards by section 756 of the Code of Civil Procedure, but he took no proceeding for this purpose, and the action continued in the name of the judgment debtor until it was finally tried apd determined, and the judgment roll filed, on the 30th of July, 1883, by which it was determined that the judgment debtor was not the owner of the property, but that it belonged to the defendant, Harriet B. Berdell.

According to the views expressed in Campbell v. Hall (16 N. Y., 575), this judgment having been recovered after the receiver acquired his title, would not have been conclusive against him upon the right of the judgment debtor, without the filing of the notice of the pendency of the action. In this respect a distinction has been maintained between actions for real property, and for the recovery of personal property, by or in favor of persons acquiring rights •or interests under one of the parties during the pendency of the litigation. Holbrook v. N. J. Zinc Co., 57 N. Y., 627.

Still it was also held in Jackson v. Stone (13 John., 447), that a person acquiring possession of real estate under the defendant in an action of ejectment, was bound by the judgment afterwards recovered. But that rule seems to have been peculiar to that form of action. And it was probably to place the subject entirely at rest that the Code of Civil Procedure, as well as the preceding Code, provided for the filing of a notice of the pendency of the action with, or subsequent to the time of filing the complaint, where the object may be to affect the title to real property

The Code of Procedure was in force on this subject when the action was commenced, and the notice and complaint were filed in the suit of Robert H. Berdell, and by section 132 of that Code it was declared that “From the time of filing only shall the pendency of the action be constructive notice to a purchaser, or incumbrancer, of the property affected thereby, and every person whose conveyance or incumbrance is subsequently executed or subsequently recorded, shall be deemed a subsequent purchaser or incumbrancer, and shall be bound by all proceedings taken after the filing of such notice, to the same extent as if he were made a party to the action."

The judgment creditor became an incumbrancer upon the property on the 2d of October, 1816, when his judgment was recovered and a transcript of it was filed and docketed, and he by the language of this section was as much bound by the action of Berdell v. Parkhurst and Berdell as though he had in fact been made a party to the suit. When the receiver was appointed he took no more than the right and title of the judgment debtor Robert H. Berdell to the real estate in controversy. And as that had previously been subordinated to the preceding action, the receiver acquired it subject to the same incumbrance. Beyond that, the order appointing him when it was filed operated as a conveyance or transfer of the real property of the judgment debtor to the receiver. It was in fact a conveyance by operation of law and subjected the receiver to the proceedings in the pending action as much so as though he had taken a deed from the judgment debtor Berdell in form conveying the title to the property. It was in substance a subsequently executed conveyance, and within this section of the Code, as well as sections 1610-11 of the Code of Civil Procedure afterwards taking effect. He was bound by all the proceedings taken in the action of Berdell the same as though he had been a party to the suit. He came in under him and subjected himself to the determination afterwards made in the action. He permitted the proceeding to go forward in the name of Berdell without in fact taking the charge and control of it himself as he was authorized to do. The judgment which was recovered in that action adjudged Berdell, the judgment debtor, not to be the owner of the property now in but that the defendant in this action had become vested with the title to it and was at the time’ of the recovery of the judgment on the 18th of June, 1883, the owner in fee of the land, and no change in her title appears afterwards to have taken place. This judgment, with this proof of the filing of the complaint and the notice of the pendency of the action, should have been held conclusive upon the trial against the action of the receiver. He should not have been permitted as he was to recover a judgment for the possession of the property or for its rents- and profits.

This judgment should be reversed and a new trial ordered, with costs to abide the event.

Van Brunt, P. J , and Brady, J., concur.