Opinion
Submitted January, 1870
Decided March, 19th, 1870
Luther R. Marsh, for the appellant.
A.J. Vanderpoel, for the respondent.
Although the facts are quite numerous, I am convinced that there is really but one important question involved in the decision of this case, which is, whether Ringel, by the commencement of his equity action against Victor Heubach, Alfred Heubach, Augustus Johnson, and their assignee, Henry Heubach, and the service of an injunction, without a judgment, or the appointment of a receiver, in said action, prior to the sale of the personal property by the sheriff, by virtue of the executions issued upon the two judgments which were recovered by Billhofer Arnold against Victor Heubach, Alfred Heubach and Augustus Johnson, one on the 21st October, 1860, for $3,687.84, the other on the 13th November, 1860, for $2,023.15, acquired such a lien upon said property as created a preference in favor of Ringel, superior to the title acquired by the levy and sale under the Billhofer Arnold executions. In this controversy, Davenport, the receiver, and Kelly, the sheriff, are, in effect, merely nominal parties, the real parties in interest being Ringel, represented by the receiver, and Billhofer Arnold, represented by the sheriff. Davenport, the receiver, was appointed in the action first commenced by Billhofer Arnold. By an order of the Supreme Court, made on the 30th day of November, 1860, modifying an order made on the 14th day of November, 1860, in said action, it was provided that the residue of the property in the hands of the receiver, after a sale by him, amounting to the gross sum of $8,500, should be exempt from the further operation of the receivership in that action. Such sale was made by the receiver, and the said gross sum was realized. All of the parties had notice of such order and of the sale. A motion was made by Ringel for the appointment of a receiver in his action, but before the making of said motion, and consequently before the granting of an order for the appointment of a receiver, the sheriff proceeded and sold the residue of the personal property, under the two executions in favor of Billhofer Arnold; such sale being made on the 20th day of March, 1861. I am of opinion that the sale of the property by the sheriff was regular and valid, and that Billhofer Arnold were entitled to the proceeds of such sale, in preference to Ringel; that, until the appointment of a receiver, no such lien upon the personal property was acquired as prevented such levy and sale by virtue of the executions. This was expressly decided in Storm v. Waddell (2 Sandf. Ch. Rep., 494, 516); and to the same effect is the decision in Van Alstyne v. Cook ( 25 N.Y., 489, 496). In Lansing v. Easton (7 Paige Ch. Rep., 365), the chancellor remarks: "The ordinary injunction upon a creditor's bill, which only operates upon the defendant, will not, of course, prevent another creditor from levying upon property of the defendant, which is the proper subject of a levy and sale on execution, before the title of the defendant in such property is equitably divested by an order for a sequestration thereof, or for the appointment of a receiver." In Van Alstyne v. Cook, above referred to, Judge SMITH remarks: "When an order is made for the appointment of a receiver of particular property, it amounts to sequestration, by act and operation of law, of such property; and when the receiver is subsequently appointed, the title to such property vests by relation from the date of the order, to the same effect as if such receiver was named in and appointed by such order." See also West v. Fraser (5 Sandford, 653); Edwards on Receivers, 98; Becker v. Torrance ( 31 N.Y., 634). It is very clear that, as to personal property which is the subject of levy and sale on execution, a creditor, by an equity suit, acquires no preference, as against a judgment creditor of the debtor, until the entry of an order appointing a receiver in such equity suit. The vigilant creditor who, by his execution, seizes and sells the property of his debtor, before the appointment of a receiver in an equity action, secures a preference which the law sanctions and protects. Whether the same rule applies in regard to property which is not the subject of levy and sale by execution, we are not required to express an opinion in this case, as it is not involved. The judgment should be affirmed with costs.
All concur for affirmance, except SUTHERLAND, J., who did not vote.
Judgment affirmed.