McCorkle v. Herrman

• Decision Date: 26 November 1889
• Parties: McCORKLE v. HERRMAN.
• Court: New York Court of Appeals Court of Appeals

117 N.Y. 297

22 N.E. 948

McCORKLE

v.HERRMAN.¹

Court of Appeals of New York.

Nov. 26, 1889.

Appeal from supreme court, general term, first department.

The complaint alleges the appointment of the plaintiff as receiver of the property of John J. Murphy in proceedings supplementary to execution, December 4, 1886, and that the order for the examination of Murphy, the judgment debtor in said proceedings, was served November 27, 1886. It further alleges that on September 26, 1886, an agreement was entered into between Murphy and the defendant, by which the former was to complete a building for the latter in the city of New Yokr, and furnish the work and materials for the same, for the sum of $3,000, and to accept the sum of $2,500 for extra work and materials previously furnished thereon, which the defendant agreed to pay. It alleges performance by Murphy, and that there is due and owing by the defendant on the contract the sum of $1,400, which balance the plaintiff, as receiver, has duly demanded of the defendant, but which the defendant has refused to pay, and the plaintiff demands judgment therefor. The defendant, in his answer, admits the appointment of plaintiff as receiver, and the filing of a bond by him as receiver, as alleged in the complaint. The defendant, in his sixth answer of defense, alleges that the claim set forth in the complaint has, by due proceedings under the statutes of this state, been subjected to liens under the mechanic's lien law in favor of various persons named, creditors of Murphy, for labor and materials furnished for said building, which liens are subsisting, and that the amount owing by the defendant on the contract with Murphy is chargeable under said liens with the amount thereof, prior to the alleged claim of the plaintiff, and that such liens were filed and in existence ‘at and prior to the commencement of this action.’ The answer further alleges that the liens were for valid debts owing by Murphy to the several lienors, and that the amount of said debts exceed the balance due from the defendant under the contract, and that such balance is payable to the lienors, and not to the plaintiff, and that a suit has been commenced to foreclose said liens, and that the plaintiffs and defendant in that action are necessary parties to this action. The answer concludes by demanding that the complaint be dismissed, or for such further judgment as may be just, or the nature of the case may require. The plaintiff demurred to the sixth defense for insufficiency. The demurrer was overruled at the special term, and final judgment entered for the defendant dismissing the complaint. The judgment was affirmed by the general term, and the plaintiff appeals to this court.

Howard R. Bayne, for appellant.

Francis C. Reed, for respondent.

ANDREWS, J., ( after stating the facts as above.)

The defendant has taken no proceedings in the nature of an interpleader, under section 820 of the Code of Civil Procedure, and the sufficiency of the sixth defense or answer must be determined by the test whether it alleges facts which on their face show that the plaintiff has no right of action. The plaintiff's right, as receiver, to recover the amount owing by defendant under the contract with Murphy at the time the receiver was appointed, in the absence of any valid prior liens upon the fund in favor of other persons, is undisputed. By section 2468 of the Code of Civil Procedure the property of a judgment debtor is vested in a receiver appointed in supplementary proceedings, who has duly qualified, ‘from the time of the filing of the order’ appointing him, except that in case of real property the vesting only takes place from the time the order is filed in the county where the real property is situated, and, in case of a debtor who at the time the order is filed resides in another county, his personal property is vested when the order is filed in the county where he resides. By section 2469, where an order for the debtor's examination has been served, the receiver's title, when vested pursuant to section 2468, ‘extends back so as to include the personal property of the judgment debtor at the time of the service of the order,’ except as against bona fide purchasers, or against creditors who have meanwhile received payment from their debtor in good faith, and without notice. The words ‘personal property’ in this section include money, chattels, things in action, and evidences of debt. Section 3343. Section 2469 is a new provision, not found in the former Code, and appears to have been inserted to change the rule declared in Becker v. Torrance, 31 N. Y. 631, to the effect that no equitable lien was acquired by a creditor on the property of his debtor by the commencement of supplementary proceedings, and that when a receiver is appointed his title relates to the date of his appointment, and is subject to any lien on the debtor's property acquired by third persons intermediate the commencement of the proceedings and the appointment of the receiver. The defendant, in the answer demurred to, alleges the existence of liens on the debt acquired under the mechanic's lien law, and, in substance, that such liens were prior to the claim of the plaintiff. But the answer does not state at what date the notices of liens were filed; the only averment on that point being that the liens were filed and in existence ‘at and prior to the commencement of this action.’ The action was commenced March 16, 1887, several months after the commencement of the supplementary proceedings. In view of the allegations in the answer that the alleged liens were filed at and prior to the commencement of the action, no other lien being mentioned, it cannot, we think, be intended in support of the pleading that the filing of the notices of lien antedated the commencement of the supplementary proceedings. From all that appears they may have been filed subsequent to that time. If the defendant had averred generally that the claim sought to be...