In re Lewis & Fowler Manuf'g Co.

DYKMAN, J. This is an appeal from an order denying a motion to set aside a levy made by the sheriff under an execution in favor of John Boyle and William H. Macy on a judgment entered in the supreme court of New York on the 21st day of January, 1895, which execution was issued to the sheriff of Kings county on the same 984 day,—subsequent to the filing' of the order appointing a receiver, and prior to the time when the receiver filed the security required by law. A petition for the voluntary dissolution of the above-named company was presented to the supreme court, at special term, on the 18th day of January, 1895; and on the next day an order was entered directing all persons interested in the company to show cause on the 8th day of June, 1895, why it should not be dissolved, and appointing Charles G-. Dobbs temporary receiver, with a bond of $50,000, and enjoining the prosecution of all suits, including those already commenced. The temporary receiver named filed his bond on the 22d day of January, 1895. Judgment for $2,841.06, in favor of I. T. Williams and others, was entered on January 17, 1895, against the defendant,, and a judgment for $1,529.10, in favor of the Street Bailway Publishing Company, was entered on January 19,1895, against the defendant. On the same morning, but before the receiver was appointed, execution was issued on those judgments, and a levy was made before the order of January 19th, appointing the receiver, was entered. After the appointment of the receiver, but before he filed his bond, and on January 21, 1895, a third judgment was entered against the company, for $1,880.91, in favor of John Boyle and W. H. Macy. Execution was also issued on this judgment, and delivered to the sheriff, who claimed to hold possession of the property upon which he had levied by virtue of the three executions upon the three judgments. The receiver was in possession of funds of the company sufficient to pay all three of these judgments, but he desired to pay two, and have the levy under the execution upon the Boyle and Macy judgment set aside. The facts in relation to the recovery of the latter judgment are these: The suit was commenced by the service of a summons on the company on the 12th day of January, 1895. The order was based upon a duly-accepted draft for the payment of money. The draft was set out in the complaint, which was duly verified. The time to answer expired on the 18th day of January, 1895, and on the evening of that day a demurrer to the complaint was served upon the attorney for the plaintiff. On the 21st day of January a motion was made for judgment upon the demurrer, as frivolous. The motion was granted without opposition, and a judgment in favor of the plaintiffs was entered on the same day (January 21st), at 10:35 o’clock in the forenoon of that day. Immediately thereafter a transcript of the judgment was duly docketed in the office of the clerk of Eiings county, and an execution was issued to the sheriff of the county of Kings at 11:05 o’clock on the 21st day of January, 1895. At that time the receiver had not qualified by filing the security required by law. Boyle and Macy were delayed by the frivolous demurrer of the defendant to their complaint. If the demurrer had not been interposed, their judgment would have been entered on the 19th day- of January, before the order was made appointing the receiver, and then the execution upon their judgment would have been entitled to a priority. The interposition of the demurrer was a fraud upon the plaintiffs, Boyle and Macy, and upon the due administration of 985 justice. There was no defense to the action, and the complaint was sufficient. The execution upon the judgment of Boyle and Macy was executed and issued to the sheriff on the 21st day of January, in the forenoon, as we have seen. The receiver had not then taken possession of the property, and was not entitled to do so until he had filed his bond, which he did the next day. Boyle and Macy acquired a lien upon the personal property of the company upon the delivery of their execution to the sheriff, but when the bond of the receiver was filed his title related back to the time of his appointment, which was anterior to the lien of Boyle and Macy under their ■execution. In re Christian Jensen Co., 128 N. Y. 550, 28 N. E. 665. Their lien was therefore divested, if the doctrine of relation is allowed its full force against them. That doctrine is a fiction of law which was adopted for the advancement of right and justice, and resort is made to it for no other purpose. It is not adopted where third parties, who are hot parties or privies, will be prejudiced thereby. In fact, fictions in law are never to be implied to perpetuate a wrong, or defeat collateral acts which are lawful and concern strangers. Pierce v. Hall, 41 Barb. 146; Jackson v. Davenport, 20 Johns. 551; Heath v. Ross, 12 Johns. 140. It will therefore be no violation of the principles which underlie the doctrine of relation to exempt the judgment of Boyle and Macy from its operation, and subject the title of the receiver to the lien of their judgment. -On the contrary, it would be quite inconsistent with the doctrine of relation to subordinate the rights of Boyle and Macy to the title of the receiver. Fiction is not fact. It is not equivalent to fact. The fact was that plaintiffs, Boyle and Macy, acquired a lien upon the property of the defendant on the 21st day of January, 1895, at 10:35 o’clock in the forenoon. At that time the receiver had no title to the property of the defendant, and no right to interfere with it in any manner or for any purpose. Oh the 22d day of January, 1895, the receiver filed his official bond, and the title to the property vested in him, in fact and in law, at that time. By a fiction of law,' Ms title related back to the day of his appointment, for some purposes, such as its preservation and protection, but not for the purpose of destroying vested rights, or for any other unjust purpose. It would be unjust and wrong to permit the vested rights of the plaintiffs, Boyle and Macy, which they had acquired by virtue of the execution upon their judgment, to be divested by fiction. Our conclusion, therefore, is that the lien of the plaintiffs, Boyle and Macy, was not destroyed by the filing of the bond of the receiver, or in any other manner; that such lien continued, and the receiver took title to the property subject to that lien, and subject to the rights of Boyle and Macy to "have their judgment paid out of the property before any right of his attached. The order should be affirmed, with $ 10 costs and disbursements. All concur.