Sullivan v. Miller

• Decision Date: 04 October 1887
• Parties: SULLIVAN and others v. MILLER and others. In re Petition of LITTLE and another v. AMES, Receiver, etc.
• Court: New York Court of Appeals Court of Appeals

106 N.Y. 635

13 N.E. 772

SULLIVAN and others

v.MILLER and others.¹

In re Petition of LITTLE and another

v.AMES, Receiver, etc.

Court of Appeals of New York.

October 4, 1887.

James R. Marvin, for appellants.

Thos. D. Robinson, for respondent.

RUGER, C. J.

The petitioners Little and Demorest commenced these proceedings to vacate and annul an order previously made in this action, which authorized Ames, the receiver, to sell certain property and pay the liens thereon, and to obtain an order requiring the receiver to pay the amount of a judgment recovered by them against Miller. The relief sought by the petitioners was denied by the special term, and upon appeal its order was affirmed by the general term, whereupon this appeal was taken.

The situation out of which the controversy arose is substantially as follows: On the fourth of January, 1883, Miller, being in embarrassed circumstances, made a general assignment of his property to Knox for the benefit of his creditors. Among the property thus assigned were certain stereotype and electrotype plates, then in the possession of Little and Demorest as custodians for Miller, and the eventual appropriation of the value of which is the subject of controversy in this proceeding. In July, 1882, these plates were mortgaged by Miller to one Masterson to secure the payment one year from date of $6,500, borrowed money, and providing for the possession of the property by Miller until default in the payment of the mortgage. This mortgage was not filed until January 4, 1883, the day upon which Miller executed his general assignment. It is not claimed that either the assignment or the mortgage were fraudulent in fact; but it is alleged that the mortgage is void as against creditors and bona fide purchasers for want of filing at the time of its execution.

In March, 1883, Little and Demorest recovered judgment against Miller for an indebtedness accruing between July, 1882, and January, 1883, and in March, 1883, attempted to levy upon the plates under an execution issued upon such judgment. Knox, having committed some violation of his duty as assignee, was by an order of the court in this action, on February 19, 1883, removed from his position, and Ames was thereupon appointed receiver pendente lite of the property covered by the assignment. After Ames' appointment, he attempted to obtain possession of the plates from Little and Demorest; but they refused to give them up, claiming to hold them under the levy made by the sheriff upon their execution; and, when this claim was adjudged against them, still claimed to hold them under a lien for storage. Both of these claims were duly presented to the court in proceedings instituted by Ames, as receiver, against Little and Demorest and the sheriff of New York, to recover possession of the property, and it was adjudged in such proceedings that Little and Demorest acquired no lien upon it by virtue of the levy under their execution or otherwise, and that the receiver was entitled to the possession of the property by virtue of the assignment and his appointment as receiver. These orders were not appealed from, and the questions therein decided are res adjudicata between the parties to this proceeding.

The plates in question were, previous to July, 1883, delivered by the petitioners to the receiver, and he thereafter held them as a part of the assigned estate. The adjudications referred to were made previous to July, 1883, and after that time no further attempt was made by Little and Demorest to establish a lien upon the property, or to reach the proceeds of its sale until the commencement of these proceedings in November, 1884. In March, 1884, Ames applied ex parte to the court for its direction as to the disposition of this property, upon a petition showing that it was of greater value than the amount of the lien upon it, and that its further retention by him would entail large expense upon the estate. The court, on March 15, 1884, made the order, which this proceeding sought to vacate, directing him to sell it for a sum not less than $7,800, and to pay the mortgage debt out of such proceeds. The receiver thereupon sold the property at public sale, and from a portion of the proceeds paid the amount of the mortgage debt to Masterson, the mortgagee.

It is claimed by the appellants that the receiver could not do this in good faith, as he had been notified of their claim and the grounds upon which it was based. A written notice to this effect was claimed to have been served upon Ames on July 6, 1883, but the receiver disputed the fact of its service. The question whether the notice had been served was made the subject of a reference by the court upon the hearing of this proceeding, and was the principal one litigated in that court. Much evidence was given on both sides of the question; the receiver, Ames, testifying positively that such a notice had never been served. Upon this disputed question of fact the referee found that the evidence did not establish the service of the notice. This report was confirmed by the court, and the facts found thereby are not open to controversy here.

The petitioners insist on this appeal that they are entitled to have the order of March 15, 1884, vacated so far as it directs the payment of the Masterson mortgage, and to have an order made directing the receiver to pay them the amount of their judgment. We do not think they were entitled to the relief demanded. The order which they ask to have set aside has already been executed by the receiver, the property has been sold under it, and the proceeds paid over under the direction of the court in good faith by the receiver. The effect of the order...