Court Opinion

ID: 3585940
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:35:54.760123+00
Date Added: 2024-06-11T13:58:56.353360
License: Public Domain

By the order of the court, the receiver who had rendered an account of the moneys received by him in this action was directed to pay over the same to the defendant Lucke, from whom they were received, and also to pay the referee's fees upon the accounting. As the action has been dismissed, and the plaintiff has failed to maintain it, there would, under ordinary circumstances, appear to be no *Page 148 
question as to the propriety of refunding the money to the party from whom it was received. The right, however, of the receiver to retain possession of the money is sought to be maintained on several grounds, and it is insisted that he should not be compelled to pay it over because he holds it as receiver in the case of Dwyer v. O'Mahoney, Belmont and Lucke, being appointed such receiver in the last named action subsequent to his appointment as receiver in the case at bar. The action last mentioned was commenced in the Supreme Court for the purpose, among other things, of obtaining control of moneys which it was alleged the defendant O'Mahoney had in the hands of Belmont 
Co., or within their control and that of the said O'Mahoney. The injunction order provided for the appointment of a receiver of money deposited, or lately on deposit, in the hands of the defendants Belmont and Lucke, to the credit of the defendant John O'Mahoney. It is quite apparent that the description of the money does not embrace the funds in controversy. None of the money was then on deposit, nor had Belmont and Lucke ever received any money whatever on deposit from O'Mahoney. Belmont had received money in payment of bills of exchange, which were delivered to O'Mahoney's agent, and the money paid by Lucke to the receiver was the money of Belmont  Co., and did not belong to O'Mahoney. It was forced from Lucke under the pressure of imprisonment for an alleged contempt, by virtue of an order which was reversed, and which the circumstances show never should have been granted. Nor did it become the money of O'Mahoney because it was thus paid, or in any way liable to the control of a receiver in another action. The court has so decided, and held that the money was the money of Belmont  Co., and came from their funds. It is quite clear that the order in question did not sufficiently describe the fund, or show that it was the fund held by the receiver in this case. The rule is well settled that the order should describe with sufficient particularity the property which the receiver is to take, and unless this is done he cannot hold it. (Crow v. Wood, 13 Beav., 270.) The *Page 149 
decision of the court and the want of a proper description of the money claimed should be conclusive upon the question, and preclude the receiver from asserting any claim.
There is another answer, however, to the objection urged and that is, that the funds were in the possession of a receiver appointed in an action pending in the Superior Court, and it was under the jurisdiction of that court, and by it alone could all claims to it be determined. (Peale v. Phipps, 14 How. [U.S.], 374; Milwaukee R.R. Co. v. 20 Wis., 165.) The order of another court appointing a receiver was then subject to the right of the court in this action, to make such disposition of the fund as they might deem proper, and when that was done there remained no fund under the control of the receiver in the action of Dwyer. The court had an undoubted right to restore it to the parties to whom it belonged, and having done so, it is effectually disposed of.
The claim of the defendants' counsel, that a subsequently appointed receiver after a prior receiver becomes functusofficio, and takes from said prior one the fund, or any remaining portion of it, and the authority cited to support it (Bailey v. O'Mahoney, 10 Abb. [N.S.], 270), must be considered with the limitation that the subsequent receiver only takes what is undisposed of by the court in the litigation, which in this case could be no part of it, as, by the judgment of the court, the moneys belonged to the defendants. The proper course for parties in any other action, after a receiver is once appointed and has taken rightful possession, is to make an application to the court, and it is a contempt for a third person to interfere, or even by a suit or other proceeding at law to obtain possession, without the permission of the court by whom the receiver was appointed. (Noe v. Gibson, 7 Paige, 513.) Even if the powers of a receiver may be extended in one case to another, there is no reason why the receiver last appointed should be vested with any authority over the fund, after it has been disposed of by the determination of the previous action. If the Supreme Court *Page 150 
had the right to appoint a receiver over the fund in controversy, it by no means follows that the order which was made without notice to the defendants is binding upon them. They would have a right to be heard upon that question, and without such an opportunity I am at a loss to see how their rights could be judicially determined.
In the case of Talmadge v. Belmont and others, which was commenced in the New York Common Pleas, the order, under which the receiver also claims to hold the money, restrained the defendants from receiving the moneys and funds in the receiver's possession, and the receiver from paying them to the defendants. This order is liable to some of the objections already stated in the case of Dwyer, and for that reason was inoperative in preventing the court from controlling the funds. But were it otherwise, the consent of the plaintiff in writing, that the stay or order be waived so that the receiver may restore to the defendant Lucke the moneys in his hands, and subject to the order of the court, is a full answer to any claim of the receiver by virtue of this action. The objection that the waiver is not sufficient, because it is subject to a condition which the respondent has not accepted, appears to be without any foundation.
It is further urged that the receiver should only be required to pay such sums as he has received from the Bowling Green Savings Bank, with whom the money was deposited. The receiver swears that the bank at the time was solvent, and he had then, and continued to have at the time of its failure, a large amount of his own money deposited in it, and that he had no intimation, suspicion or reason to suspect that the bank at the time was in an embarrassed condition. There is no other evidence that the institution was a safe or proper one for such a deposit, or in good credit or standing. It is exceedingly questionable whether the evidence referred to is sufficient to exonerate the receiver from liability, without some proof of the standing of the bank in question. This class of moneyed institutions are not ordinarily designated by the courts as depositaries for *Page 151 
trust funds under their control. It was not certainly one of the institutions where trust funds were usually deposited for safe keeping, and it would appear, from the absence of evidence to that effect, that it was not recognized generally as a suitable and secure place for such a deposit. But without deciding the question, this court has held that the receiver thrust himself into the position he holds wrongfully, against the wishes of the attorneys of both parties, and where the defendants were entirely responsible, and any amount which might have been recovered would have been paid. (See opinion on appeal from order affirming order of General Term sustaining exceptions to referee's report on receiver's accounts.)
Under such circumstances the receiver does not commend himself to the protection which the court extends to officers of this character, when lawfully and properly appointed. He made himself the custodian of the fund when it was useless, pressing his claims with great vigor, and I think he must abide the consequences of the position which he was thus voluntarily assumed.
The order of the General Term was right, and should be affirmed with costs.
All concur.
Order affirmed.