Case Name: WREDE v. GILLEY et al.
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1908-12-08
Citations: 113 N.Y.S. 609
Docket Number: 
Parties: WREDE v. GILLEY et al.
Judges: 
Reporter: West's New York Supplement
Volume: 113
Pages: 609–610

Head Matter:
WREDE v. GILLEY et al.
(Supreme Court, Special Term, New York County.
December 8, 1908.)
Bankruptcy (§ 196*)—Estate—Assets.
Where a receiver in supplementary proceedings of a debtor owning a membership in the New York Stock Exchange did not take any steps to follow the debtor’s property in such membership and recover the same until after a trustee in bankruptcy had been appointed for the debtor and there had been a sale of the membership, the surplus proceeds of the sale, after deducting claims payable under the rules of the ex change, were payable to the trustee in bankruptcy, and not tb the' receiver.
[Ed. Note.—For other cases, see Bankruptcy, Cent. Dig. § 316; Dec. Dig. § 196. ]
Action by'John A. Wrede, as receiver in supplementary proceedings of William S. Alley, against Franklin W. Gilley, treasurer of the New York Stock Exchange, and William L. Clarke, as trustee in bankruptcy of Alley, to recover the value of a membership in the New York Stock Exchange owned by Alley prior to his bankruptcy and death. Judgment for defendant Clarke.
John H. Rogan (Albert Ritchie, of counsel), for plaintiff.
Albert C. Aubery, for defendants Clarke, Carter, Eedyard, and Mil-burn.
For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep’r Indexes

Opinion:
NEWBURGER, J.
On July 10, 1906, one Oothout recovered a judgment against one Alley, and on the 19th day of February, 1907, the plaintiff was appointed receiver of the property of Alley in supplementary proceedings and qualified as such receiver on the 25th day of February, 1907. On the 3d day of May, 1907, on his own petition, Alley was adjudicated a bankrupt in the United States Court for the Southern District of New York, and the defendant Clarke was appointed trustee in bankruptcy on the 10th day of June, 1907. On the 5th day of August, 1907, after he had been declared a bankrupt, the bankrupt died. At the time of filing his petition in bankruptcy he was a member of the New York Stock Exchange, which fact is set forth in the schedules annexed'to his petition in bankruptcy. Three days after his death, on the 8th day of August, 1907, the Stock Exchange sold the bankrupt's membership, and, after deducting certain claims payable under the rules of' the Exchange, there remains a surplus of $9,764.19, which is now on deposit in a trust company. This action is brought by the plaintiff to recover the fund thus remaining.
The defendant Clarke claims the fund by reason of his appointment-in the bankruptcy proceedings. Had the plaintiff instituted proceedings immediately after his appointment, and taken steps to follow whatever property there was in the membership of the Exchange, he would have been protected at this time, and would have been entitled to the fund now on deposit; but it appears that there were no steps taken by him until after the trustee in bankruptcy had been appointed and the sale of the membership had taken place, see Metcalfe v. Barker, 187 U. S. 165, 23 Sup. Ct. 67, 47 L. Ed. 122. Therefore, under the bankruptcy law, the fund becomes a part of the bankrupt's estate, and the defendant Clarke is entitled to a judgment directing that the same be paid over to him.
Submit findings and decree.