Myrick v. Selden

By the Court, E. Darwin Smith, J. The demurrer in this case, I think, was rightly disposed of at the special term. The supplemental complaint set up no right of action, as against the defendants Selden and Graves. The plaintiff and Selden are both judgment creditors of the defendant Frost, and are both pursuing their lawful remedies for the collection of their respective judgments from the equitable property of. their common judgment debtor. The property of Frost, which both creditors are seeking to reach, is vested in the receiver Graves, and can only be appropriated by him under the order of this court. The receiver, it is true, was appointed upon the application of Selden in the proceedings instituted by him supplemental to execution, but he is as much an officer of the court under such appointment, and under its control, as though he had been appointed in an action, and the plaintiff, upon proper application, is entitled to have the defendant Graves appointed receiver in his suit also. The court does not, in such cases, appoint more than one person receiver of the property of a judgment debtor, however many creditors’ bills or proceedings supplementary to execution are instituted against him, as such appointment in one suit or proceeding completely divests the judgment debtor of his title to all his property. The question of priority of lien upon the equitable property of the judgment debtor in the hands of a receiver, which is the only question presented upon this supplemental bill, is not properly, I think, the subject of an action. It can be, and usually is, [21] presented and disposed of summarily by the court. (Boynton v. Rawsen, 1 Clarke, 584.) I can see no necessity or occasion for presenting and litigating this question by action, and I should be disposed to sustain this demurrer upon this sole ground. The defendant Selden has done nothing to interfere with or infringe upon the just rights of the plaintiff—nothing to warrant subjecting him as a party to the plaintiff’s suit against Frost and Band. He has simply asserted his own legal rights, and by superior diligence has obtained the prior appointment of a receiver, in his proceedings. The plaintiff has no ground of complaint on this account, nor any other that I can see, against Selden; and the defendant Graves is merely the receiver. The prior appointment of a receiver does no necessary wrong to the plaintiff. Of itself it settles nothing. It merely preserves and secures the property of Frost for his creditors. But if it were necessary, in disposing of this demurrer, to decide the question which of these parties, the plaintiff or the defendant Selden, had the prior lien upon the property in the hands of the receiver, I should certainly, after the great delay of the plaintiff in prosecuting his action, hesitate long before I concurred in a decision which should deprive the defendant Selden of the benefit of his superior diligence, and give to the plaintiff the fruits of his long and serious litigation to reach the equitable property and assets of Frost, even though I were satisfied that the suit of the plaintiff should be deemed first commenced and a Us pendens in respect to such property thereby created. The action was commenced against Band in December, 1851, and as against Frost, September 12th, 1852. The order upon supplemental proceedings instituted by Selden was made July 17th, 1852; and the order appointing a receiver was made July 19th. On the 6th of August, 1852, the receiver qualified, and on the same day Frost made an assignment to him of his legal and equitable property and interests. Since the defendant Frost put in his answer in this action, on the 4th of October, 1852, it does not appear [22] that any proceedings have been had in said suit, till the service of the supplemental complaint making Selden and Graves parties, which was verified July 25th, 1860. Here .was an interval of nearly eight years, in which no proceedings were had in the action. In the meantime Selden had diligently prosecuted his suit and proceedings, and had discovered and reached a fund sufficient, probably, to pay his judgments. It would be the height of injustice, now, to let the plaintiff step in and reap the fruit of this litigation, and I am satisfied he has no such right. The commencement of a suit in equity by the service of a summons and injunction upon Frost doubtless created a lis pendens and a lien in the nature of an attachment, (Corning et al. v. White, 2 Paige, 567,) or a statute execution upon his equitable property. (Weed v. Pierce, 9 Cowen, 729. Beck v. Burdet, 1 Paige, 309. 4 id. 42. 5 id. 13. 6 id. 445.) But the plaintiff was bound to prosecute his action diligently, to retain his lien, or it would cease, like that of a dormant execution. Chancellor Walworth, in Edmeston v. Lyde, (1 Paige’s Ch. 637,) says of the creditor in such a case, “if he abandons the pursuit, or lingers by the way, before he has obtained a specific lien, he has no right to complain if another creditor obtains a preference by superior vigilance.” The delay of nearly eight years by the plaintiff, in the prosecution of his suit, it seems to me, should be deemed an abandonment or waiver of his prior right, if he had acquired any such right, by the commencement of his suit, as against the defendant Selden. But upon the point whether the plaintiff’s suit was first commenced, if it be necessary to decide it now, I concur in the opinion of the judge at special term, that as against the defendant Frost, and so far as a lis pendens is concerned, to create any lien upon his’ equitable property, this suit was not commenced until the service of the subpoena and injunction upon Frost, in September, 1852. He and Band were not united in interest in any just sense, within the intent and meaning of section 99 of the code. This section declares that an action shall be [23] commenced as to such defendant when the summons is served on him, or on a co-defendant who is a joint contractor, or is otherwise united in interest with him. Frost and Eand were not joint contractors, and were in no way united in interest. Eand is a fraudulent grantee of Frost, but he denied his fraud and claimed to be the absolute owner of the property in hostility to Frost and his creditors. I can see no ground on which the complaint can be sustained, and think that the order sustaining the demurrer thereto by the defendants Selden and Graves should be affirmed with costs. [Monroe General, Term, September 2, 1861. Smith, Johnson and Knox, Justices.]