COLOMBIA BANK v. INGERSOLL

COLOMBIA BANK v. INGERSOLL. N. Y. Supreme Court, Special Term, First District; May,. 1888. Supplementary proceedings ; irregularity of order for payment by third, persons to sheriff of moneys belonging to judgment debtor.] An order in supplementary proceedings, directing third persons to pay over to the sheriff moneys belonging to the judgment debtor, is irregular, where the fact that a receiver of the judgment debtor’s property had been previously appointed, was concealed, although the consent of the judgment debtor to such payment was obtained before the order was made. Attachment; when not a lien on subsequently accruing rents.] Attachments were served on third persons alleged to be indebted to defendant, and the attaching creditors afterwards obtained an order directing such third persons to pay to the sheriff their indebtedness (which consisted of rents accruing subsequently to the serving of the attachments), to be applied in satisfaction of the creditors judgments. Subsequent to the service of the attachments, but before the granting of the order directing payment to the sheriff, another creditor recovered judgment, and instituted supplementary proceedings and had a receiver appointed,—Reid, that the attaching creditors did not obtain such a lien on the rents "as entitled them to the order applying the rents to their judgments. The rents should be placed in the hands of the receiver, and held by , him subject to the order of the court.- Motion for an order directing the sheriff to pay over moneys in his hands to the receiver, or for an order vacating and setting aside an order which directed third persons indebted to the defendant to pay over the indebtedness to the sheriff. The Columbia Bank commenced an action in this court against Lorin Ingersoll, and obtained an attachment therein, an June, 1887, which was served upon the firm of Watson, Karsch & Co., as parties alleged to be indebted to the der if end ant, on June 15, 1887. George W. Van Slyck also commenced on action against Ingersoll in the court of common pleas in June, 1887, and ;he also obtained an attachment, which was served upon Watson, Karsch & Co, on June 15, 1887, "but subsequent \to the attachment of the Columbia Bank. No service of either of said attachments has been made -on said firm since said date. The firm of Watson, Karsch & Co., are tenants of the .premises No. 71 Bowery and Nos. 47 to 53 Ohrystie Street, an the City of New York, under a written lease for five years from May 1,1887, under which they pay $9,000 rent per .annum in quarterly payments. Lorin Ingersoll, the judgment debtor, owns an undivided •half interest in fee in said premises, and is entitled to one half of the rents therefrom. The Columbia Bank entered judgment against Ingersoll for $4,725.10 on July 28, 1887 ; an execution thereon was "issued September 13, 1887. In the suit of George W. Van Slyck, judgment has not yet been entered, and the attachment is still in the hands of the sheriff. The Rhode Island National Bank obtained a .judgment against Ingersoll for $5,053.49, on November 5, 1887; ■execution thereon had been issued and returned unsatisfied. Proceedings supplementary to execution were duly instituted on behalf of the Rhode Island National Bank, and on March 24, 1888, Alfred I. Walker was duly appointed receiver of the judgment debtor on motion of the bank; the order ■appointing the receiver was duly filed and recorded in the •office of the clerk of this court on March 30, 1888 ; and the bond of the receiver was duly approved and filed on March 30, 1888. The receiver duly served written notice of his appointment on Watson, Karsch & Co., on April 3, 1888, and in the notice made demand for the rents from the premises which had accumulated in the hands of said tenants. The order appointing the receiver was personally served on the judgment debtor, and on his attorney, on April 2, 1888. " . No further proceedings were taken by the Columbia Bank under its judgment or execution until April 17,1888, when an order was obtained requiring the firm of Watson, Karsch & Co. to attend and be examined in aid of the execution. W. Morris Watson, of the firm, was examined, and he admitted that the net rents accumulated was $2,221.20, ■that the same were held subject to the order of the court. Upon that deposition, and an affidavit of J. Homer Hildreth, the attorney for the Columbia bank, an order was presented to Mr. Justice Barrett, requiring Watson, Karsch & Co. to pay over the rents to the sheriff; the justice stated that ■“ there should be notice of this application to the judgment debtor.” The attorney for the Columbia Bank then ob-. tained a written consent to such an order, signed by Ingersoll in person. The affidavit of Hildreth states that no receiver had been appointed in his action, but wholly fails to make any mention of the appointment of Walker as receiver in the action of the Rhode Island National Bank. Thereupon an order was made by Mr. Justice Ingraham, •on April 25, 1888, directing Watson, Karsch & Co. to pay the sum of $2,221.20 immediately to the sheriff to be applied towards the satisfaction of the judgment of the Columbia Bank. This order recites that the possession of the money by the judgment debtor is undisputed. At or about the time the firm paid over the moneys, both Watson and Karseh stated to Mr. Hildreth that a receiver had been appointed, and that he had made demand. In spite of such notice, the order was exhibited, and the sheriff took the fund by virtue thereof. The Rhode Island National Bank now moves that the' sheriff be directed to pay over to Walker, the receiver of the judgment debtor’s property, the moneys in his hands, or for an order vacating or setting aside the order which directed Watson, Karseh & Co. to pay over to the sheriff the rents which had accumulated. Michael H. Cardozo and Edgar J. Nathan, for the motion. The attachments served in June, 1887, created no-lien whatever upon the rents accruing subsequent to its-service (Code Civ. Pro. § 648; Bills v. National Park B’k, 47 Super. Ct. [J. & S.] 302; Wood v. Partridge, 11 Mass. 488; Thorp v. Preston, 42 Mich. 511; B. & O. R. R. v. Gallahue, 14 Gratt. [ Va.] 563; Strauss v. R. R., 7 W. Va. 368 ; B. & O. R. R. Co. v. McCullough, 12 Gratt. 595; Wentworth v. Whittemore, 1 Mass. 470; Bates v. N. O. J. & G. N. R. R., 13 How. Pr. 516; s. c., 4 Abb. Pr. 72; Wyman v. Hickborn, 25 Vt. 610; Jones v. Bradner, 10 Barb. 193; Drake on Attachment, § 551; 2 Wade on Attachment, § 449; Davis v. Ham, 3 Mass. 33). The rents-were not attachable as an interest in real estate (Code Civ. Pro. §§ 645, 649, sub-d. 1; Drake on Attachment, §§ 239, 240; Kneeland on Attachment, §§ 382, 472; Taylor v. Mixten, 11 Pick. (Mass) 341; Phillips v. Ash, 63 Ala. 414; Scott v. Manchester Print Works, 44 Mt. 507; Saunders v. Columbia L. I. Co., 43 Miss. 583; Carter v. Champion, 8 Conn. 549). The lien of an attachment must be-acquired, if at all, when the warrant is first served (Drake on Attachment, § 234; Crocker v. Pierce, 31 Me. 177). Geo. W. Van Slyck and J. Homer Hildreth, opposed. [MAJORITY — Van Brunt, J.] Van Brunt, J. There is no doubt but that the order under which Watson, Karsch & Co. paid over the money in question to the sheriff was irregular. There seems to have been a studious suppression of the fact that a receiver of the judgment debtor had been appointed, and tliat.the judgment debtor had therefore no power to consent to the entry of the order under which said payment was made. There is, however, another question presented, and that is as to the lien upon these moneys acquired by the attachment. No lien upon rents is acquired by the filing of a lis pen-dens against the real estate. All that could be sold under an execution issued upon a judgment in an action where real estate had been attached, would be the right, title and interest of the judgment debtor in the real estate at the time of filing the lis pendens. It makes the lien that of a mortgage and no more. It in no way gives right of possession nor is there any way by which rents can be impounded by reason of such a levy. Even if the rents can be attached before becoming due (which is not necessary to decide here) it is evident that they can only be reached by levying upon the lease under which such rents arise, and there is no pretence that any such levy was made here. If such lease is the subject of levy, it must be because it is an instrument for the payment of money, and therefore a levy can only be made by taking the lease into the sheriff’s actual custody (Code Civ. Pro. § 649; Anthony v. Wood, 96 N. Y. 180 ; by which the case of Bills v. National Park Bank, 89 N. Y. 343, is distinctly overruled). These considerations show that there is no such clear right as would entitle the attaching creditors to an order applying this money upon their executions. It is not necessary to determine the rights of the attaching creditors between themselves. The motion should be granted directing the sheriff to pay over this money to the receiver with costs against the Columbia Bank, such receiver to hold the same subject to-the order of the court, and no order should be made disposing of the same without due notice to the so-called attaching creditors. Ordered accordingly.