Boynton v. Seibert

Lawrence, J. This action is brought by the plaintiff as receiver appointed in supplementary proceedings of the defendant Albert E. Seibert, to obtain a certain fund alleged to be in the hands of the defendants Arthur H. Hasten and George L. Nichols, as em [311] ployers of the defendant Seibert. The complaint alleges entry of judgment July 12, 1899, issuance of execution thereon July 12, 1899, and on the 28th of September, 1899, respectively, and that the same have been returned wholly unsatisfied. It is further alleged that the order in supplementary proceedings wherein plaintiff was appointed receiver was made June 7, 1900, and was served upon the judgment debtor on that day, and that on the 18th of July, 1900, plaintiff was appointed receiver in such proceedings. It is further alleged that at the time of the service of the order in supplementary proceedings, and at the time of the appointment of the plaintiff as receiver, the defendant Seibert owned the chose in action, which alleged chose in action is stated to be an agreement entered into- on the 30th day of September, 1899, between Hasten & Nichols and Seibert, whereby Seibert agreed to perform certain services for them for the term of one year from September 30, 1899, to and including September 30, 1900, for which Hasten & Nichols agreed to pay a salary at the rate of thirty-five dollars per week. It was further agreed that the judgment debtor should also receive, at the end of the year a percentage upon the net receipts of the firm during that period over and above a fixed sum to be drawn by the two partners; that Seibert entered upon the employment and performed the agreement upon his part, and that the defendants have failed to pay said percentage, which amounts to at least the sum of $350. The defendants demur to the complaint on the ground that it does not state facts sufficient to constitute a cause of action; and in support of the demurrer it is argued that as the receiver takes title only to moneys actually due the judgment debtor upon the date of the making service of the order in supplementary proceedings this action cannot be sustained. See Gibney v. Reilly, 26 Misc. Rep. 275; Matter of Trustees of Board of Publication, 22 id. 645, and cases cited. I do not think that these cases are conclusive in this case, for the reason that it seems to me that the receiver became vested with the legal title of the judgment debtor to the contract with Hasten & Nichols, which is referred to in the complaint, and is entitled to any amount which may be found due under that contract to- the extent of the judgment under which the receiver was appointed. It was held by the Court of Appeals, in the case of Reynolds v. Ætna Life Insurance Co., 160 N. Y. 635-637, that the right acquired by a receiver in supplementary proceedings in policies upon the debtor’s life owned by the debtor, is not limited to their sur [312] render value, and that, if the policies are kept in force by the insured, the receiver is entitled, on their becoming due, either by the expiration of their term or by. the death of the insured, to the amount due upon them not exceeding the amount of the judgment represented by him. In this case the receiver became vested with legal title to the agreement between Seibert and the defendants Hasten & Nichols, and to all rights which Seibert had thereunder at the time of tie receiver’s appointment; and as it is expressly alleged in the complaint that the defendant Seibert duly performed the agreement on his part, and that a specific sum became due thereunder, I think the case comes within the reasoning of the Court of Appeals in the case of Reynolds v. Ætna Life Insurance Co., supra. It therefore seems to me that a cause of action is stated in the complaint, and that the demurrer should be overruled, with costs, with leave to defendants to answer over on payment of such costs. Demurrer overruled, with costs, with leave to defendants to answer over on payment of costs.