Rich v. Loutrel

Ingraham, J. This action was between partners to dissolve and settle a partnership. On the 7th of May, 1859, a motion was made for a receiver, and an order of reference made to appoint a receiver. On the 27th of May the receiver was appointed by an order of the court, and he took possession of the partnership effects. On the 16th of May, 1859, McSpedon & Baker recovered a judgment against the defendant for $204.80, and an execution issued to the sheriff. . On the 14th of May, 1859, Smith & Peters recovered a judgment against the same defendants for $140.56, and on the same day an execution was issued to the sheriff. Under these executions the sheriff levied on sufficient property to pay the same. On the 24th of J une, McSpedon & Baker recovered another judgment, and issued execution to the sheriff. After the appointment of the receiver, he took from the sheriff the property on which he had levied under the order of the court, and the plaintiffs in those actions now move for an order directing the receiver to pay those judgments, in which motion the sheriff unites. Other judgments were afterwards recovered, as stated in the petition, but further reference to them is not necessary. The judgments recovered prior to the appointment of a re [357] ceiver, and under which executions had been levied on the defendant’s property prior to that time, are entitled to be paid. This point was expressly decided by the general term of this district, in the case of The American Gutta Percha Co. (9 Abbott s Pr. R., 70). Although in that case the order appealed from, denying the motion, was affirmed, on the ground that the sheriff did not unite in this application, Mr. Justice Davies, in delivering the opinion, distinctly states that the judgment should be paid, and that the sheriff could make application for an order to that effect. A contrary opinion was expressed in Rutter a. Tallis (5 Sandf., 610), upon the ground that the title of the receiver related back to the date of the order of reference, in analogy to the former practice in the Court of Chancery. I feel, however, controlled by the opinion expressed in the case above referred to in this court, and also concur in that decision. The plaintiffs in those executions, by the actual levy, obtained a priority of which they ought not to be deprived by the appointment of a receiver in such an action. If the proceeding had been taken by a prior creditor, another question would be presented. But in this action between the defendants themselves, if the judgment-creditors could thus be deprived of their liens, the partners, by collusion, might defeat such creditors, and retain the proceeds of the property, by at any time discontinuing their action. It was intimated in the case in the Superior Court, that the court would not permit such a suit to be discontinued. But by the rule of this court, the action could be discontinued on filing the consent to discontinue, and no order of the court is necessary. As regards the judgments recovered after the appointment of the receiver was perfected, no lien was acquired by the issue of the executions, and there is no reason to order their payment. Those creditors must take other proceedings to compel the proper application of the partnership property to the payment of the debts of the firm. Motion granted, directing the receiver to pay to the sheriff the amount due on the several executions held by him, and levied on the defendant’s property, prior to the date of the receiver’s appointment.