Court Opinion

ID: 3618198
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:00:47.368694+00
Date Added: 2024-06-11T12:39:25.333908
License: Public Domain

Two questions of importance are raised for consideration upon this appeal. 1st. Whether the judgment in the foreclosure action was void as to the defendant, Aaron D. Patchin, because he was not served with process and had no knowledge of the existence of the action, but was represented by an attorney who was not employed by him, or by his authority. 2d. Whether the plaintiff, by the commencement of the present action, which is in the nature of a creditor's bill, to collect the judgment for deficiency upon the sale of the premises in the foreclosure action, acquired such a lien upon the mortgage bonds in question, which survived the death of Patchin, and entitled the plaintiff to have the proceeds of the bonds applied to the payment of his debt, in preference to the claim of the other judgment creditors of Patchin, whose judgments were recovered prior to that of the plaintiff, to have the same applied by Nichols, the administrator, in the due course of administration, in payment of debts according to their priority, as prescribed by the statute regulating such payments. In regard to the first question, it is found by the referee that Mr. Haven appeared as the attorney of Mr. Patchin, in the foreclosure action, at the instance of some member of Mr. Patchin's family, to prevent his being disturbed by the service of process, as he was then sick, and *Page 32 
from home, staying at Clifton Springs for the benefit of his health. That said Haven was a responsible attorney, and acted in good faith in what he did. All the circumstances attending such appearance show clearly that there was an entire absence of fraud or collusion. In my judgment the law upon this question is too firmly settled in this State by repeated decisions of this and other courts, to justify us in hesitating in regard to the binding effect of such appearance by Mr. Haven as the attorney for Patchin in the foreclosure action. In the following cases this question is discussed and decided, both in regard to causes where there was, as well as where there was not, service of process upon the party for whom the attorney appeared without authority from such party; and they fully sustain such appearance. (Hamilton v. Wright, 37 N.Y., 502; American Ins.Co. v. Oakley, 9 Paige, 496; Denton v. Noyes, 6 John. Rep., 296; Jackson v. Stewart, id., 34; Republic of Mexico
v. De Arangoiz, 5 Duer., 643.) In some instances where an attorney has assumed to appear for a party without authority, the courts, upon direct application, have granted relief such as was consistent with the rights of all parties interested. (Elsworth v. Campbell, 31 Barb., 135; Blodget v. Conklin,
9 Howard, 442; Denton v. Noyes, 6 John. Rep., 296.) I think the law, as settled in this State, rests upon principle as well as authority. The attorney is an officer of the court, acting under oath, and liable to be disgraced and punished for such gross violation of duty, as to fraudulently appear in an action without authority; and I apprehend the instances are rare indeed when it has occurred. Again, a contrary rule would, it seems to me, be impracticable, as the title to real property depends to a great extent upon the records of the courts; it would be a great hardship to compel parties in tracing titles acquired through such records, in every instance where a judgment has been entered, to inquire into the particular authority which an attorney had to appear in such actions. Indeed, the effect of such a rule would be to create positive distrust as to the soundness and regularity of such titles. I *Page 33 
think the objections, on the grounds of hardship and danger, urged against upholding such appearance by an attorney rest more in theory than practice. If a party will omit to apply to the court for relief against an unauthorized appearance of an attorney, he should not be allowed to attack proceedings collaterally upon such ground. The law in this State, upon this subject, is settled upon a sound basis, having due regard to the rights of all parties who may be interested, and, in my judgment, should not be disturbed.
With the other question, in regard to the effect of the lien claimed by the plaintiff upon the bonds in question, I have much greater difficulty. Mr. Patchin, the judgment debtor, died before the appointment of a receiver in this action, and his assets passed to the defendant, Nichols, as his administrator, who has the possession thereof, including the bonds in question. The statute, which controls his administration in regard to the payment of the debts of the intestate, provides as follows (2 R.S., p. 89, § 27, Edm. ed.): "§ 27. Every executor and administrator shall proceed with diligence to pay the debts of the deceased, and shall pay the same according to the following order of classes. 1. Debts entitled to a preference under the laws of the United States. 2. Taxes assessed upon the estate of the deceased, previous to his death. 3. Judgments docketed and decrees enrolled against the deceased according to the priority thereof respectively. 4. All recognizances, bonds, sealed instruments, notes, bills, unliquidated demands and accounts." Mr. Nichols, as such administrator, holds the bonds in question for the purpose of applying the avails thereof to the payment of the debts of the intestate, in accordance with the direction of the above statute. Creditors, other than the plaintiff, insist that the fund in question be applied upon their judgments, which were recovered prior to that under which the plaintiff claims. The defendant insists that, by the death of Patchin before any receiver was appointed in this action, all his choses in action and equitable interests devolved upon and vested in his personal representative, and that no preference has *Page 34 
been acquired by the plaintiff, in consequence of the commencement of this action, over other creditors of Mr. Patchin, and that the plaintiff must abide the result of a due course of administration, in regard to the payment of his claim. This proposition is sustained by two decisions. (Sylvester v.Reed, 3 Edwards Ch. R., 296; Mathews v. Neilson,Administrator, c., id., 346.) The case first referred to was affirmed by the chancellor upon appeal. These cases are directly in point; and, if they are to be regarded as sound expositions of the law upon this question, they are decisive of the case at bar. I have failed to find any decision which expressly overrules them, or which establishes a different doctrine. The case ofStorm v. Waddell (2 Sanford Ch. Rep., 494) has been referred to, in which the doctrine, in regard to equitable liens, is very elaborately discussed; but that case does not undertake to overrule the cases cited from 3 Edwards Ch. R. Where a creditor, in the lifetime of his debtor, procures the appointment of a receiver in an equity action, or where a creditor attaches the choses in action or equitable interests of a debtor, he acquires a legal right to the possession of such property, which the law recognizes and protects, and the administrator cannot deprive the creditor of such possession and right, without satisfying the debt. It is well settled that, as to property which is subjectto levy and sale on execution, the mere commencement of an equity action, without the appointment of a receiver, will not prevent the seizure and sale of such property under an execution issued upon a judgment recovered subsequent to that, to collect which, the equity action is prosecuted. (Van Alstyne v. Cook,25 N.Y., 489; Storm v. Waddell, 2 Sanford Ch. R., 494;Lanning v. Easton, 7 Paige Ch. Rep., 365.) Is not the reason for the rule this; that where the possession of the property is acquired by legal right, as by levy on execution, a mere equitable lien, which is created by the commencement of an equity action, will not be allowed to prevail over the legal right. Now apply that principle to the case at bar. The statute to which we have referred vests *Page 35 
in the administrator the legal right to the possession of the property in question, and that statute directs him in regard to the manner it shall be applied in payment of debts. It would seem to follow that the mere equitable lien acquired by the plaintiff must yield to the superior legal right acquired by the administrator under the statute, for the benefit of the creditors of the intestate. When the remedy at law is complete, equity does not interfere. Through administration upon the estate of the intestate, every judgment creditor shares in the distribution, according to priority; which is just. During the lifetime of the debtor, it requires the intervention of a court of equity to reach his choses in action and equitable interests; but when he dies, the law substitutes a legal remedy, viz., administration. If the view thus taken is correct, it follows that the plaintiff must seek payment of his judgment in the due course of administration upon the estate of Mr. Patchin. Whether the equity action could be revived for any purpose, it is unnecessary to inquire. The judgment of the General Term should be affirmed, and final judgment ordered for the defendant, with costs of the General Term and of this court.