Webb v. Osborne , 15 Daly 406 ( 1889 )

Larremore, C. J.

I have stated above all the facts which seem to me to have any material bearing upon the present controversy. The respondent claims that, because the original order appointing the receiver was not filed in the county clerk’s office until after the execution and delivery of the deed from the judgment debtor te John H. Taylor, the receivership of Mr. Fixman never applied to the real estate in question. But the order extending such receivership was duly filed in said county clerk’s office before the making of said deed, and, under the circumstances of this case, I think such filing was sufficient for all purposes of vesting the receiver with the legal title to' the Osborne apartment house. Section 2466 of the Code provides that, when a receiver has already been appointed, the judge, instead of appointing another receiver, must make an order extending the receivership. There is no doubt but that Mr. Fixman was legally appointed in the first suit. The original order appointing him was duly made, and, together with his bond, filed in the office of the clerk of this court. In my judgment, this constitutes a valid appointment, within the meaning of section 2466, regardless of the fact whether or not the receiver completely qualified in the first suit by filing such original order in the county clerk’s office. The section then proceeds: “Such an order gives to the judgment creditor the same rights as if a receiver was then appointed upon his application.” The following section directs that an order appointing the receiver or extending the receivership shall be filed in the county clerk’s office. As far as the form of this language indicates anything, the intention would seem to be that an order of original appointment and one extending a receivership were of co-ordinate authority, and that the tiling of either of such orders would accomplish the result of a legal qualification on the receiver’s part. This theory of construction is strengthened by the similar language of section 2468, which provides that the title of the judgment debtor’s property shall vest in the receiver from the time of the filing of an original order of appointment, or an order extending the receivership. There is no express language requiring the original order to be filed with the county clerk before the order extending the receivership shall become valid. On the contrary, the purpose appears, by clear implication, from all the sections referred to, to make the filing of such order of extension in all essential respects an equivalent to the filing of the original order, and not a mere concomitant thereof. My conclusion is that, under section 2468, the real property of the judgment debtor became vested in the receiver on the 3d day of March, 1887, when the order extending the receivership was filed in the county clerk’s office, and that the subsequent deed by the judgment debtor conveyed nothing. It follows that the order directing the tenants to attorn and pay rent to the receiver was properly granted, under rule 78. The point has been made on behalf of the appellant that the granting of such order was error, because, when a judgment debtor is seised of real estate, the proper course for the creditor to pursue is to issue execution against and sell the same, and not to seek to collect his judgment out of the rents through a receiver. The cases of Bank v. Martin, 2 N. Y. Supp. 315, and Bunn v. Daly, 24 Hun, 526, are cited in support of this contention. But in both of these eases the application before the court was to appoint a receiver, and not to extend aid to a receiver already appointed. The grounds for the principle laid down in such authorities are stated in Bank v. Martin, supra, as follows: “If the plaintiff should be permitted to procure the appointment of a receiver, and thus vest the title of the real estate of the judgment debtor in such receiver, it could, be sold, and the judgment debtor deprived of the right of redemption which is given to him in case of a sale by execution. It was the duty, therefore, of the plaintiff to have caused the house and lot to be sold on execution, thus exhausting its remedy by execution before resorting to these proceedings, ” It thus appears that the reason for the rule that plaintiff shall exhaust his remedy by execution before proceeding against the property by means of a receiver is that, if the other course were adopted, a judgment debtor’s right to a redemption might be taken away. Such rule, therefore, exists for the judgment debtor’s benefit, and to protect his strictly legal rights. It can have no relevancy or force in the case at bar, because here it expressly appears that the order extending the receivership was formally consented to on the judgment debtor’s part. The order appealed from should be reversed, with costs.