Opinion
Argued November 27, 1893
Decided December 12, 1893
Henry L. Burnett for appellant. Franklin Bien for respondent.
Mr. Tailer did not pay the money voluntarily, but only by reason of the order of the Special Term of the court and under protest. The receiver was a moving party to the proceeding resulting in the granting of such order. By the terms of the judgment appointing the receiver, the defendant Tailer had the right to pay the amount of plaintiff's judgment and costs directly to it, and such right remained until ten days after the service upon Tailer of a certified copy of the judgment or decree. This certified copy was never served upon him, and hence the receiver never had the legal right to demand or receive possession of the property held by Tailer. In addition to that defense, the defendant Tailer had appealed from the judgment avoiding the assignment to the Court of Appeals, and had given a valid undertaking to stay proceedings upon such judgment pending that appeal.
Notwithstanding these facts, and in spite of them, the receiver, while the appeal was still pending, took active measures to obtain possession of the property, and to that end applied to the court, with the result as already stated.
Upon appeal to the General Term by Mr. Tailer that court reversed the order of the Special Term and denied the receiver's application, and held, that the receiver, when he applied for it, had no right to the possession of the property. Mr. Tailer's motion made to the General Term, after such reversal, for an order of restitution, has been granted with a proviso that the receiver may retain a sum named for his commissions, counsel fees and disbursements. The correctness of that allowance is the sole point in this appeal.
The counsel for the receiver maintains that the order is not appealable to this court, for the reason that it was a discretionary one with the General Term. If this be true we cannot review the exercise of that discretion, unless in case of an abuse thereof, which does not appear. In one aspect the action of the court may be regarded as discretionary. It may not be bound to act when its action is invoked by a mere motion or application for an order of restitution. It might deny that mode of relief and turn the party over to his action. If, however, it retain the application it must decide upon the facts which are presented to it, and if they show a legal right to demand restitution, and a legal right to the full sum demanded, I apprehend there is then no discretion with the court to refuse to grant any relief, or to grant but a portion of the relief demanded. Under such circumstances the court is not asked for a favor which it may grant upon such terms as it shall choose to impose; hence Brownell v. Ruckman ( 85 N.Y. 648), is not in point. If the application be wholly denied, and nothing further appear in the order, it may very possibly be that the denial would be regarded as an exercise of the discretion vested in the court, whether to entertain such application or not, and the order of denial might not be appealable. When, however, the application is entertained, and an order for restitution in part is made, if, as matter of law, the applicant is entitled to restitution of the whole, then the order which refuses it is appealable here.
The case of Holloway v. Stephens ( 58 N.Y. 670), decided in this court without an opinion, is not in conflict with these views. In that case the court below directed defendant to restore the property received by him by virtue of the judgment, which was subsequently reversed. The defendant appealed to this court from such order for restitution and the appeal was dismissed. The record shows that the order for restitution was undoubtedly right. The court below having made a correct decision and the record coming here for review, it may be that technically the form of our order should have been an affirmance of the order appealed from, instead of a dismissal of such appeal. The case cannot be cited as an authority that in such a case as this the action of the court below may not be the subject of review by this court. The order was a final one; it affected a substantial right; it was not a matter of discretion, and it was made upon a summary application after judgment. The Code makes such an order appealable to this court (Code Civ. Pro. sec. 190, sub. 3).
I say the order was not a matter of discretion. If it were, of course, the action of the General Term is final. If the court below had in any possible aspect the right to allow these commissions and counsel fees, then we are concluded by its action.
The General Term has held (and we agree with it) that the receiver had no right to the possession of these moneys. The Special Term of the Supreme Court thought differently and so ordered. While that order was in force, it was a protection to the receiver, and an answer to any opposition which might be made to the allowance of the receiver's commissions and counsel fees. When the order was reversed and the application of the receiver for the possession of the property was denied, then the receiver ceased to have the right to retain the moneys for the purpose of taking his commissions and fees to counsel out of them. The person who had the moneys in his possession when the order to deliver them to the receiver was made, had the legal right to be restored to such possession when that order was reversed and the receiver's application denied. ( Haebler v. Myers, 132 N.Y. 363, and cases cited.) We must regard the possession of the receiver as wholly unauthorized, because the order upon which alone his right is based has been reversed and held to have been unauthorized and illegal. This money belonged to the assignee so far as the receiver is concerned. A portion of it, under the judgment, the assignee was directed to pay to the plaintiff, and the balance he was entitled to retain as the owner, in trust, of course, for the payment of the debts of the assignors. The receiver, under an order which has been reversed, has obtained possession of these moneys, and he must now pay them back undiminished by any claim for commissions or counsel fees paid to his counsel.
It is the same in regard to this property as if the receiver ought not to have been appointed. In such case, if the receiver has taken possession of property, he must deliver it up and cannot have his own commissions deducted. ( Weston v. Watts, 45 Hun, 219.) The fact that the assignee now acquiesces in the payment by the receiver of the amount of the plaintiff's judgment, is no waiver of any right of the defendant to question the receiver's right to the fund or to insist upon the re-payment of the balance after the crediting of the plaintiff's judgment. Although not entitled to the moneys, and although he procured such possession in spite of the opposition and under the protest of the defendant Tailer, the receiver paid the plaintiff's judgment, with the acquiescence, it may be said, of Mr. Tailer. This is no waiver of the rights of the latter and gives the receiver no right to exact commissions thereon. We do not decide that in all cases where an order appointing a receiver, or an order directing funds to be placed in his possession is reversed, no commissions can be allowed the receiver. There may be circumstances existing in any such case which would render it matter of discretion whether or not to permit commissions, etc., to the receiver, and with its exercise we would have no right of review, if not abused.
Here, however, we think there was no discretion. The provisions of the judgment, under which alone the receiver could claim a right of possession, had not been complied with by him, and he had no right whatever to these moneys. The defendant Tailer, if the moneys had not been already paid over by him, would have had the clear, legal right to retain them when the order was reversed. The receiver never having had the right to take the moneys, as has been adjudged, should have been compelled to pay over the whole amount demanded, being the balance in his hands and the interest earned by it, after deducting the amount paid to the plaintiff for its judgment.
If the receiver is entitled to collect his commissions, etc., from any one, it is probably the plaintiff, who seems to have joined him in his attempts to obtain possession of the fund and to defend the same.
The order should be amended by striking out the permission to the receiver to retain the $450, and he should be directed to repay the whole balance in his hands, with the interest actually earned and received, after deducting the payment made by him to the plaintiff. No costs will be imposed upon the receiver in this court.
All concur.
Ordered accordingly.