Denison v. Jackson Bros. Realty Co.

Rich, J.: The plaintiff: appeals from an order vacating an order in Supplementary proceedings which required the respondent by its president to appear and be examined concerning property in its hands belonging to the judgment debtor. The order from which the appeal is taken was made for the sole reason that a receiver of the judgment debtor had been appointed and had duly qualified. Sorrentino v. Langlois (144 App. Div. 271) was cited by the learned justice at Special Term as authority. The only question presented by this appeal relates to the power of the court to order the examination of a third party after the appointment of a receiver for the judgment debtor. This precise question was presented to this court in Smith v. Cutter (64 App. Div. 412), in which it was held that the appointment of a receiver of a judgment debtor in proceedings supplementary to execution does not prevent the judgment creditor from obtaining an order for the examination of a third party. Mr. Justice Sewell said: “If an order appointing a receiver terminated the proceeding in which he was appointed it would not prevent the judgment creditor from pursuing another proceeding to examine a third party having property of the judgment debtor.” The receiver here was appointed without an examination of any one, and, as said by Judge Smith in People ex rel. Fitch v. Mead (29 How. Pr. 360), “ it cannot be that he [the judgment creditor] loses all right to discover * A * after the appointment of such receiver.” It is stated in Smith v. Cutter (supra), and it is the law of this State, “ that when an affidavit stating the jurisdictional facts is presented the judgment creditor is entitled to institute a proceeding for the examination against a person who has property of the judgment debtor, independent of the fact that a proceeding for the examination of the judgment debtor is pending or has resulted in the appointment of the receiver.” It is the purpose and object of the proceeding to discover property of the judgment debtor, and this purpose would be entirely nullified if a receiver by refusing to institute a proceeding against a third party having property of the debtor in his possession, could successfully contend that his appointment prevented the judgment creditor from availing [477] himself of the examination and discovery secured to him by statute. It is contended by the learned counsel for respondent that this court, in the case of Sorrentino v. Langlois (144 App. Div. 271) has overruled Smith v. Cutter {supra), and while it would seem that there is a conflict in the two decisions, there was no such intention. In the Sorrentino case the defendant unsuccessfully moved to vacate an order for the examination of a third party and the reversal was necessary because the moving affidavit did not show that thé person to be examined had personal property of the defendant exceeding ten dollars in value or that she was indebted to him in a sum exceeding ten dollars, without reference to the fact that a receiver had been appointed, and this was the real ground for the reversal. True, it was said that an examination of a third party could not be had after the appointment of a receiver, but this must be regarded as obiter. It follows that the order must be reversed. The order should be reversed, without costs,-and the proceeding remitted to the Special Term. Jenks, P. J., Carr, Stapleton and Putnam, JJ., concurred. Order reversed, without costs, and proceeding remitted to the Special Term.