In re Hone

• Citation: 153 N.Y. 522,47 N.E. 798
• Parties: In re HONE.
• Decision Date: 05 October 1897
• Court: New York Court of Appeals

153 N.Y. 522

47 N.E. 798

In re HONE.

Court of Appeals of New York.

Oct. 5, 1897.

Appeal from supreme court, general term, Fourth department.

In the matter of the accounting of Frank J. Hone, as receiver of Charles F. Lighthouse, a judgment debtor. The receiver appeals from an order of the general term of the appellate division (41 N. Y. Supp. 1118, mem.) affirming the order of the general term. Affirmed.

Elbridge L. Adams, for appellant.

Walter S. Hubbell, for respondents.

O'BRIEN, J.

The receiver has appealed from an order which directed him to account and pay over to Swanton & Acker the sum of $1,920, less commissions, being the amount that came to his hands under the following circumstances: He was appointed the receiver of one Lighthouse on or about the 13th of May, 1895, in proceedings supplementary to execution, instituted by a judgment creditor. The receivership was subsequently extended to other judgments. It appears that Lighthouse, the judgment debtor, had a contract with the United States post-office department for furnishing certain mail pouches, and that at various dates between March 29, 1895, and June 29th of that year, pouches were delivered to the department to the amount of $1,920, which was audited and allowed by the department August 30, 1895. The mail pouches to pay for which this sum was allowed were produced under the following circumstances: On September 11, 1894, Lighthouse, who had the contract and the plant for manufacturing the goods, was very largely indebted to both Swanton and Acker for sums of money advanced to him, and, besides, they had assumed liabilities for him as indorsers and otherwise in sums still larger. On that day, Lighthouse transferred to them his contract with the government, and all moneys due or to become due thereon, and also the plant, composed of machinery, stock, and fixtures. This was to secure them against loss by reason of the advances they had made and the liabilities incurred. It was further agreed that they should at once take possession of the plant, and manufacture mail bags under the contract or under any order that their debtor might thereafter procure from the government. The business with the government was to be conducted by and in the name of Lighthouse, who was to have general charge, at a compensation of $30 per week, and that, in case the debt of Swanton & Acker and the claims upon which they were contingently liable were paid in full, then the business and plant should revert to Lighthouse. Under this arrangement, Swanton & Acker took possession and assumed the management and control of the business. They advanced a large sum of money for the conduct of the business, and filled the orders taken by Lighthouse in his own name. An absolute bill of sale was made to Swanton & Acker, in pursuance of the arrangement, but was not filed. A second bill was made March 5, 1895, under substantially the same arrangement, which was immediately filed in the clerk's office. On the 23d of October, 1894, following the arrangement above described, Lighthouse authorized the government to send to him, in care of a bank in Rochester, the drafts issued for mail bags, intending that, when received, they should be indorsed by him, and delivered to Swanton & Acker. The judgments upon which the receiver was appointed were recovered at the following dates: November 15, 1887; March 13, 1895; May 1, 1895; and August 6, 1895. All of them, as will be seen, were recovered subsequent to the filing of the bill of sale except the first, and none of them became a lien upon any of the property transferred. It appears that in some way notice of the receivership was given to the government, and on the 12th of September, 1895, the receiver received from the post-office department the draft of $1,920 in payment of the several invoices of mail bags, audited August 30, 1895, all of which were delivered and accepted on or subsequent to March 29, 1895, and subsequent to the filing of the bill of sale. The receiver immediately applied the proceeds of the draft to the payment of the several judgments which he represented (in the order of priority), and of his own fees and commissions, and the costs of...