Underwood v. Sutcliffe

Mullin, P. J.: The appellant’s counsel moved for a nonsuit on the trial, on the ground, among others, that the plaintiff was not legally appointed receiver of the property of the judgment debtor, for the reason that on the day to which supplementary proceedings were adjourned by the referee neither party appeared, and the plaintiff thereby abandoned the proceedings, and the county judge could not thereafter appoint a receiver. With the proceedings to appoint the receiver the appellant has nothing whatever to do. The judgment debtor is the only person who can avail himself of any irregularity in the proceedings, and in this case he concedes their regularity by not questioning them. (Tyler v. Willis, 33 Barb., 327; Hobart v. Frost, 5 Duer, 672.) Proceedings supplementary are in the nature of an action, and do [457] not terminate by tbe neglect of tbe plaintiff in tbe judgment, to appear on a day to which they have been adjourned, either by the judge or referee. But it would be irregular to proceed upon the original order after such failure to appear, and the subsequent proceedings would be set aside on motion or on appeal. Jurisdiction of the officer continues until the judgment is satisfied or the proceedings terminated by order of the judge or of a competent court. The right of the plaintiff to maintain the action is denied upon the further ground, that the receiver’s bond is dated several days before the order appointing the receiver was made. It appears by the evidence of the referee that the attention of the judge was called to the defect, if it was one; but it would seem that the bond was not received or acted upon until after the appointment of the receiver, and it then became operative against the parties to it, and they are estopped from disputing its validity. But the conclusive answer to the objection is that the appellant has no right to raise the objection. The judgment debtor alone could raise it. Again, it appears by the case that the attorney of the judgment debtor appeared before the judge, in obedience to notice to show cause why a receiver should not be appointed, and made no objection to the appointment, and all objections to the regularity of the proceedings wei’e thereby waived. (Tyler v. Willis, 33 Barb., 327; Viburt v. Frost, 3 Abb., 119.) Another ground of nonsuit relied upon by the appellant’s counsel was, that there was no evidence in the case that the conveyance from Wetherby to appellant was taken in the name of the latter for the purpose of preventing and hindering Ferris from collecting his debt from Henry C. Sutcliffe. It is impossible, it seems to me, to read the evidence of the appellant and not be satisfied that not only the land in question, but the entire property of the judgment debtor, and all the profits of the business previously carried on by his father, were transferred to the appellant without consideration, and that the improvements made upon it were paid for from the profits of the business. The appellant was a young man, unmarried, lived at his father’s, and was boarded by him without charge, worked at the business at his pleasure, without any contract as to price, and took to his own [458] use and deposited in bank or kept in a trunk belonging to him so much of his father’s money arising from the business as he desired, and so much as he desired to pay out for his personal expenses, without investing a dollar in the business except some $1,500 he got from his mother, all the rest being obtained from his father. He became the owner of a large and valuable property, leaving not a dollar with which to pay his father’s creditors. If such a transaction is not fraudulent, I am unable to imagine a case that would be. The findings of the court are fully sustained by the evidence. If it was necessary, in order to support the judgment, to lay one’s finger on the evidence in which the appellant testifies that the transactions between him and his father were fraudulent as to the creditors of the latter, it must be conceded there is no such evidence. But taking the history of appellant’s connection with his father’s business and the absorption by him of the whole property without consideration, and without leaving any thing for his father’s creditors, the evidence of fraud thus obtained is not only more conclusive, but more satisfactory than any direct admission of the appellant could be. The one -might "be the result of surprise or mistake, but the other cannot be. The appellant’s counsel insists that the receiver cannot maintain this action to satisfy the Ferris judgment out of the property obtained by appellant from his father, because his authority is limited to the property which passes to him from the judgment debtor, and cannot reach the land conveyed by Wetherby or the proceeds of it, or of the improvements made thereon. A receiver appointed in proceedings supplementary to execution may maintain an action to recover real or personal property transferred by the judgment debtor in fraud of his creditors. (Porter v. Clark, 12 How., 107; S. C., 5 Seld., 142; Edmonston v. McLoud, 16 N. Y., 543.) The parties to the fraud cannot cover the property so that it cannot be reached by the receiver by causing it to pass through numerous hands by numerous conveyances. The judgment of the Special Term must be afSimed. Present — Mullir, P. J., Taloott and Smith, JJ. Judgment affirmed, with costs.