In re Cefola

LEARNED HAND, District Judge (after stating the facts as above). [1] The question is certainly controlled by the state law, particularly sections 2468, 2469, of the Code of Civil Procedure. The first sec-tipn says that property vests in the receiver in supplementary proceedings from the date of his appointment, or of the extension of the receivership to the judgment. These dates are too late concededly. The second section defines the relating back of the title. The first subdivision applies to cases where the judgment debtor is served with the order directing him to appear for examination before the receiver is appointed. The papers show that this was never done, but, on the contrary, that the order appointing the receiver was made in accordance with the second sentence of section 2464, authorizing an appointment without notice, when the debtor could not be found within the state. The third subdivision of section 2469 provides for the relating back of the title when the order was not personally served, but when notice was given of the application for a receiver, either personally or by substitution. This subdivision does not apply to the case at bar, because neither was personal service; nor any substituted service, ever made. If it be thought that substituted service was in fact made, it is not shown that the requirements of the order for substituted service had been complied with before December 11, 1914. It follows that none of the provisions of section 2469 apply, and that the title [173] vested under section 2468, as of the date of December 21, 1914, for Tombach & McPhee, and January 11, 1915, for Ursone. [2] It is quite true that the Supreme Court has held that in the case of a judgment creditor’s bill the levy relates back to the date of bill filed (Metcalf v. Barker, 187 U. S. 165, 23 Sup. Ct. 67, 47 L. Ed. 122)] at least when the bill is to set aside a fraudulent conveyance. Assuming the same to be true in cases of creditors’ bills merely to reach assets not subject to levy, I think the matter is nevertheless clearly one of state law, as I have said, and that, when the state law prescribes the title of the judgment creditor through its receiver, it must be paramount. In re Tyler (D. C.) 104 Fed. 778. In any case, at the presenf time the question is not of distributing the money, whether in the state court or in this court, but only of an injunction against its distribution till a trustee is appointed, who can take such proceedings as he may be advised to be necessary for his protection. Clearly the case requires so much relief. The stay will be limited to a period 20 days after the trustee has been appointed and qualified and after service on him of a copy of the modifying order; otherwise, it will be maintained.