Court Opinion

ID: 5549556
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:31:09.14692+00
Date Added: 2024-06-11T08:35:01.789046
License: Public Domain

The Chancellor.
The master was right, in this case, in refusing to appoint Schenck the receiver, although he had been duly appointed in the suit commenced against this defendant and Walsh about two years before. The 139th rule did not in terms apply; as the language of the rule only extends to the case of two or more bills, filed by different persons, against the same judgment debtor or judgment debtors. The object of the rule, however, was to save the expense of different receiverships, and to prevent a conflict of claims between them as to the property assigned to them respectively, by the defendant, in the different suits. The principle of the rule should therefore be adhered to, even where the same person is made a defendant alone as the judgment debtor in one suit, and is joined with others as .defendants in another suit; where the defendants in the respective suits have no conflicting claims with each other in relation to the property which is directed to be assigned and delivered to the receiver; provided the receiver in one suit is willing to act as the receiver in the other, and to give such additional security as is required by the court. In cases coming within the terms of the rule, a receiver who has consented to accept the trust in one suit has no right todecline it in another. And where the suits are all commenced before the chancellor, or before the same vice chancellor, so as to give the same judge of the court jurisdiction over such receiver, he may be compelled to accept and execute the trust, in a second suit. Or if he will not give the additional security, which may be required of him in such second suit, the court may remove him from his receivership in the first suit, and appoint another *371person receiver, in both suits, who is able and willing to give the additional security required.
Here the first suit was commenced before the vice chancellor of the first circuit, who alone has the power to remove such receiver in case he should neglect to accept the trust and to give the additional security required in the present suit. The evidence before the master who appointed the receiver in 1843, must have showed that a bond in the penalty of $500 was sufficient to cover all the property which the judgment debtors then had. But in this suit, the master has decided that the receiver must give security in the sum of $3000. It is evident, therefore, that the greatest portion, if not all, of the property which.the defendant had at the time of the filing of the present bill, was property acquired by him since the former suit was commenced. Or that the former receiver has been guilty of a neglect of his duty; or that there had been collusion between the purchaser of the complainant’s demand in the former suit and the defendant, to keep the property out of the hands of other creditors. For Schenck, the receiver in the former suit, swears, that although he consented to be appointed receiver in that suit; he never acted as the receiver, and was never called on to act as such; and that he did not know the defendant Howard. Even the defendant himself testified before the master that he did not know that he ever executed an assignment of his property. The receiver also appears to be ignorant of the fact that an assignment was exe • cuted; though, from the testimony of Robinson, it appears that an assignment must at some time have been made, so that it came into the hands of the complainants’ solicitor in that suit. So much of this application, therefore, as seeks to reverse the decision of the master appointing Hinds the receiver, in this cause, must be denied with costs.
This disposes of the original application, which was directed to stand over for the purpose of enabling the defendant to procure affidavits, &c. He now shows that 'he was a householder and had a family in this state, before the commencement of this suit, and at the time of the decree in this cause. There was no necessity that the assignment, to be executed by the defendant, *372should contain an express reservation of property which he held merely in the character of trustee for others, upon a valid and subsisting trust, and in which property the defendant had no beneficial interest. ' For the assignment, upon its face, shows that it is made under an order of the court directing the appointment of a receiver of the money, property, things in action, and effects of the defendant merely. Nothing will pass, therefore, under the general words of that assignment, except property, or things in action, in which the defendant had some beneficial interest at the time of the commencement of the suit. Nor was it necessary to except property which the defendant had already assigned to the receiver appointed in the suit commenced in 1843. However broad the terms of the assignment may be, it is impossible that it should transfer to the receiver property in which the defendant had no interest, whatever, at the time of the execution of such assignment. But in this case, if the defendant had any interest in property which he had assigned to the receiver in the former case, it was proper that the defendant should assign it to the receiver in this suit; so that the latter would have the right to claim so much thereof as might not eventually be found to belong to the complainants in such former suit, and might call upon the former receiver to account for the same. Again, the defendant does not distinctly state that he now has any property, or things in action, in which he had a beneficial interest at the time of the commencement of the former suit in 1843.
The defendant’s objection that the assignment, as settled by the master, should have contained an exception of property which was not liable to execution, was much too. broad; as that exception would have embraced all equitable interests, as well as all choses in action, of the defendant. I presume the defendant only intended, however, to claim an exception of such articles as were by law exempted from sale on execution, by reason of the party against whom the execution is issued being a housekeeper or having a family for which he provides. To that extent, the defendant in a creditor’s bill is to be permitted to retain his property. And the assignment to the receiver should *373contain an exception, by some appropriate words, which will prevent the legal title to such exempt property from passing to the receiver by such assignment; where it is made to appear to the master that the defendant is entitled to such exemption. Even if the order for the appointment of the receiver, and directing the defendant to assign and deliver over his property, is expressed in general terms, and contains no exception of exempt property, the master, upon ascertaining the fact that the defendant is entitled to the benefit of the statutory exemption, should insert the proper exception in the assignment; notwithstanding this general language of the order of reference. (See Fitzhugh v. Everingham, 6 Paige's Rep. 29.)
It does not distinctly appear, in this case, whether the debt upon which the judgment that forms the foundation of this suit was recovered, was contracted before or after the act of 1842, increasing the amount of exempt property ¡ though, from the examination of the defendant, it is probable that a part of the debt was contracted as early as 1837. In any event, however, the defendant, as a householder, was entitled to the exemption allowed by the twenty-second section of the article of the revised statutes relative to executions against property. (2 R. S. 367.) The assignment, as settled by the master, must, therefore, be modified by inserting therein the following exception immediately before the commencement of the habendum clause: “ Except such articles of property as were, at the time of making the above recited order, legally exempt from levy and sale under any execution which might have been issued on the judgment, against the said party of the first part, mentioned and set forth in the bill of complaint filed in the cause aforesaid, in the court of chancery; upon the ground that the said party of the first part was, at the time of making such order, a householder, or had a family for which he provided.” Such an exception will protect all the rights of the defendant, whether the debt for which the complainant’s judgment was recovered was contracted before or after the passage of the act of 1842, enlarging the amount of property which is exempt from sale upon execution. *374And it will, at the same time, secure to the complainant all his legal and constitutional rights to obtain satisfaction of his debt out of the property of the defendant.