Case Name: James V. Rich agt. William N. Loutrel
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1859-10
Citations: 18 How. Pr. 121
Docket Number: 
Parties: James V. Rich agt. William N. Loutrel.
Judges: 
Reporter: Howard's Practice Reports
Volume: 18
Pages: 121–123

Head Matter:
SUPREME COURT.
James V. Rich agt. William N. Loutrel.
Where, in an action between partners to dissolve and settle the partnership accounts, a receiver is appointed, who takes possession of the partnership property, which lias been previously levied upon by the sheriff on executions issued upon judgments obtained prior to the appointment of such receiver, the receiver will be required to first pay the amount of such executions to the sheriff, out of the property in his possession. (This agrees with, and follows the decision of the case In the Matter of the North American Gutta Percha Company, 17 How. 549 ; and is adverse to Rutter agt. Tallis, 5 Sand. 610.)
New - York Special Term, October, 1859.
Motion to compel receiver to pay certain judgments.

Opinion:
Ingraham, Justice.
This action was between partners to dissolve and settle a partnership.
On the 7th of May, 1859, a motion was made for a receiver and an order of reference made to appoint a receiver. On the 27th of May, the receiver was appointed by an order of the court, and he took possession of the partnership effects.
On the 16th of May, 1859, McSpedon & Baker recovered a judgment against the defendant for $204.80, and an execution issued to the sheriff.
On the 14th of May, 1859, Smith and Peters recovered a judgment against the same defendants for $140.56, and on same day an execution was issued to the sheriff Under these executions the sheriff levied on sufficient property to pay the same.
On the 24th of June, McSpedon & Baker recovered another judgment and issued execution to the sheriff.
After the appointment of the receiver, he took from the sheriff the property on which he had levied under the order of the court, and the plaintiffs in those actions now move for an order directing the receiver to pay those judgments, in which motion the sheriff unites. Other judgments were after-wards recovered as stated in the petition, but further reference to them is mot necessary.
The judgments recovered prior to the appointment of a receiver, and under which executions had been levied on the defendant's property prior to that time, are entitled to be-paid. This point was expressly decided by the general term of this district In the Matter of The North American Gutta Percha Company (17 Howard, 549). Although, in that case, the order appealed from, denying the motion, was affirmed, on the ground that the sheriff did not unite in the application, Mr. Justice Davies, in delivering the opinion, distinctly states that the judgment should be paid, and that the sheriff could make application for an order to that effect.
A contrary opinion was expressed in Rutter agt. Tallis (5 Sand. 610), upon the ground that the title of the receiver related back to the date of the order of reference in analogy to the former practice in the court of chancery.
I feel, however, controlled by the opinion expressed in the case above referred to in this court, and also concur in that decision. , The plaintiffs in those executions by the actual levy obtained a priority of which they ought not to be deprived by the appointment of a receiver in such an action. If the proceeding had been taken by a prior creditor, an other' question would be presented. But in this action between the defend' ants themselves, if the judgment-creditors could thus be deprived of their liens, the partners by collusion might defeat such creditors and retain the proceeds of the property by. at any time discontinuing their action. It was intimated in the case in the superior court, that the court would not permit such a suit to be discontinued. But, by the rule of this court, the action could be discontinued on filing the consent to discontinue, and no order of the court is necessary.
As regards the judgments recovered after the appointment of the receiver was perfected, no lien was acquired by the issue of the executions, and there is no reason to order their payment. Those creditors must take other proceedings to com pel the proper application of the partnership property to the payment of the debts of the firm.
Motion granted, directing the receiver to pay to the sheriff the amount due on the several executions held by him and levied on the defendant's property, ptior to the date of the receivers appointment.