Quinn v. Bancroft-Jones Corporation

• Citation: 12 F.2d 958
• Parties: QUINN v. BANCROFT-JONES CORPORATION.
• Decision Date: 02 January 1926
• Court: U.S. District Court — Western District of New York

12 F.2d 958 (1926)

QUINN v. BANCROFT-JONES CORPORATION.

District Court, W. D. New York.

January 2, 1926.

Saperston, McNaughton & Saperston, of Buffalo, N. Y., for petitioner.

Allan N. MacNabb, of Buffalo, N. Y. (Harry D. Sanders, of Buffalo, N. Y., of counsel), for Wilson Corporation, Bayley Co., and Johns-Manville Co.

Moot, Sprague, Brownell & Marcy, of Buffalo, N. Y. (S. Fay Carr, of Buffalo, N. Y., of counsel), for Walbridge & Co.

Ball & Gaylord, of Buffalo, N. Y., for Penn Metal Corporation.

HAZEL, District Judge.

The ancillary receivers herein were appointed May 2, 1925. At the time of their appointment various actions were pending against the defendant, and in the action of the Wilson Corporation against defendant judgment was entered after the appointment of the ancillary receivers, to wit, on the 4th of May, 1925. Other judgments, recovered by Walbridge & Co., William Bayley Company, Penn Metal Corporation, and others, were entered thereafter.

A motion was made on November 11th by the receivers in the County Court to require the county clerk to cancel and discharge of record the judgments obtained following the appointment of the receivers and ancillary receivers, on the ground that they did not constitute liens on the property of defendant. The motion was denied in the County Court.

A restraining order was included in the order appointing the receivers, but the order was not served upon the judgment creditors who now oppose the cancellation of their judgments. It is the contention of the receivers that, since they were appointed prior to the entry of the judgments in question, no liens against the property and assets of defendant eventuated. This contention must be sustained, as defendant's property unquestionably was in custodia legis before the judgments were entered, and failure to serve the restraining order prior to the entry of the judgments is immaterial. In Davis v. Seneca Falls Mfg. Co., 8 F.(2d) 546, a case recently decided by this court, wherein it was also contended that certain judgments became liens upon the real property of the insolvent defendant, and that receivers were vested with the title to the real estate, it was said:

"In deciding this point, we must have in mind the nature of this action and the purpose in appointing equitable receivers. The general rule is that no judgment lien against the real estate can be acquired subsequent to the time when the assets come into the possession of the court. It is true that the right to acquire a lien existed, but the judgment creditor nevertheless could not, in view of the restraining order, proceed and gain a preference over other creditors. Had the transcript been filed on an earlier date, a different question would be presented, since the right of the receivers to possess...