Court Opinion

ID: 3632723
Source: CourtListenerOpinion
Date Created: 2016-07-06 00:11:47.162092+00
Date Added: 2024-06-11T13:45:11.718629
License: Public Domain

The plaintiff's execution having been placed in the sheriff's hands, and actually levied upon the goods, before the appointment of the defendant as receiver in the proceedings supplementary to execution, the sheriff acquired thereby a right to such goods superior to that of the defendant, by virtue of his appointment. (Van Alstyne v. Cook, 25 N.Y., 489.) The right of the defendant, when he had perfected his appointment by the filing of his bond, only related back to the date of the order appointing him.
The issuing and service of the order requiring the judgment debtor to appear and be examined touching his property, created no lien or interest in the property discovered by such examination, in favor of the party who instituted and carried on the proceeding, as against other creditors who might in the meantime discover property liable to execution, and cause the same to be actually seized by such process. (Voorhees v.Seymour, 26 Barb., 569.)
The proceeding supplementary to execution, is a proceeding for the discovery and sequestration of the debtor's property, for the purpose of satisfying and discharging the judgment. But no right is acquired, as against other creditors pursuing different remedies, until the appointment of the receiver.
When the receiver is appointed and has filed his bond, he becomes vested with the title to the property, for the purpose of paying and discharging the debt. He then acquires a right analogous to that of a sheriff, who has taken property in execution; a right to sell and transfer the title for the purpose of raising money to pay off and satisfy the indebtedness. If his appointment as receiver is subsequent to a valid levy by a sheriff, at the instance of another creditor of the debtor, the receiver takes, subject to the right acquired by such levy. That was clearly the case here. *Page 642 
The promise was to pay the plaintiff's execution out of the proceeds of the sale of the property, provided the levy was valid and would hold as against the proceedings supplementary.
It did not depend upon the defendant's belief, or mental assent, as to the existence of the right created by the levy, but upon the existence in fact and in law of such right, which, as we have seen, is entirely clear. There can be no doubt that the consideration for this promise is abundantly sufficient. It was the relinquishment by the sheriff of a clear legal right, which gave to the defendant a complete and perfect title to the goods which he had not previously, and thus enable him to dispose of them, free and clear of such prior and superior claim. The promise is not affected in the least, by the statute of frauds. It is not a mere promise to pay the debt of a third person, but a promise to pay off and satisfy a valid lien and claim upon property, on condition that the party promising may take and sell the property discharged from such lien and claim. I do not perceive that the question of the validity of this promise is in any way affected by the circumstance that the creditors whom the defendant represented had proceeded by action, and caused the assignment to be set aside and declared void. That action did not affect the plaintiff's levy. He was not a party to the action, and might have proceeded to sell had he seen fit while it was pending. The promise was made, and the right under the levy relinquished, after the decree declaring the assignment fraudulent and void as to creditors had been obtained. No question was then raised by the defendant, as to whether the plaintiff had not lost his right by having slept too long upon it, or anything of that nature. The only question was whether any legal right could have been acquired by taking the property in execution, between the time of the issuing and service of the order for the examination of the judgment debtor, and the order for the appointment of the defendant as receiver. The promise was made to depend upon the existence of that right only, and it is too late now to raise the question of laches in not proceeding *Page 643 
to sell under the execution. But there was in truth no laches which affected the plaintiff's rights under his execution. The goods were locked up safely in the store, and the sheriff insisted upon his right to sell, and control them, the moment the defendant undertook to exercise his rights as receiver. The sheriff was not prevented by the injunction in the order for the examination of the judgment debtor, from proceeding to sell the goods. That order did not enjoin him from proceeding as a public officer to execute his process. The defendant cannot insist that it had that effect, because that would be fatal to the argument that the plaintiff's rights had been affected by the laches. So far as appears, the delay was the mere voluntary act of the sheriff, which affected no one's rights injuriously.
The promise being a valid one, I do not see why this action for the money may not be maintained upon it. The defendant has sold the property and realized a sum of money for it much more than sufficient to pay and satisfy the plaintiff's judgment. It was this money which he promised to pay, when he should sell the property and obtain it. The promise was for the plaintiff's benefit exclusively, and although not made to him directly, is available to him upon the principle established in Lawrence v.Fox (20 N.Y., 268), and Brown v. Beers (24 id., 178). Having adopted it he may maintain his action upon it instead of proceeding against the sheriff.
I am of the opinion, therefore, that the action was properly brought, and the plaintiff entitled to recover. The judgment should consequently be reversed and a new trial granted, with costs to abide the event.
DAVIES and HOGEBOOM, JJ., were for affirmance. All the other judges being in favor of reversal,
Judgment reversed. *Page 644