Courtright v. Vreeland

Lehman, J.

The plaintiffs herein sue as receivers of the Pennsylvania Tanning Company. They allege in their complaint that they were duly appointed receivers of the said company by order of the Court of Common Pleas of the State of Pennsylvania on the 22d day of January, 1908; that, on the 23d day of March, 1908, an action was commenced in the Supreme Court of this State by one Bichard D. Uhtoff against the Pennsylvania Tanning Company; that the said Bichard D. Uhtoff applied in the said action for a warrant of attachment, and that the defendant and one William Barton, on or about the twenty-third day of March, entered into an undertaking to pay all damages which the said company might sustain by reason of the said attachment, not exceeding the sum of $220.25; that a levy was made in accordance with the warrant,- and the plaintiffs, as receivers of the said company, caused a motion to be made to vacate the said warrant of attachment", and the court, on or about the 9th day of June, 1908, duly vacated the said attachment; that by reason of the attachment the said company was injured in the sum of $221.65; that the Pennsylvania Tanning Company duly assigned .the claim and demand against the defendant to the “ plaintiffs, who then became and ever have continued to be the sole owners and holders thereof;” that, on the 23d day of September, 1908, the plaintiffs duly notified the defendant of the order vacating the said attachment and of their receivership and demanded payment of the said sum of $220.25.

The defendant, in his answer, set up as a defense to this complaint, and by way of set-off and counterclaim thereto, that, on or about the 25th day of March, 1908, E. E. Vreeland, a corporation, began an action in the Supreme Court of this State against the Pennsylvania Tanning Company to recover the sum of $601.87 for the sale of advertising space between the dates of hTovember 14, 1907, and February 5, 1908, and obtained a judgment against the said company for the sum of $671.25 on the 31st day of July, 1908; and that the said E. E. Yreeland, a corporation, assigned the judgment to this defendant, before the assignment of the Pennsylvania Tanning Company to the plaintiffs and before any notice thereof to the defendant.

At the trial, the plaintiffs proved the allegations set forth in the complaint; but the defendant was not allowed to prove the assignment to him of the judgment against the Pennsylvania Tanning Company, and in this, I think, the court erred. The assignment to the defendant is dated September 12, 1908; while the assignment by the Pennsylvania Tanning Company to the plaintiffs is dated on the 20th day of October, 1908. If the plaintiffs are claiming under the assignment, then the claim of the defendant against their assignor had accrued before the assignment and constituted a set-off, in accordance with section 502 of the Code of Civil Procedure. Bien v. Freund, 26 App. Div. 202.

The plaintiffs, however, claim that they took title to the bond at its inception, inasmuch, as they were at that time already appointed receivers of their assignor, and that no claim may be set off against them which had not accrued prior to their appointment. While it is probably true that the appointment of the plaintiffs as .receivers by the court of Pennsylvania vested the property of the corporation in the plaintiffs and fixed the rights of the parties to all controversies existing at that time (Smith v. Eighth Ward Bank, 31 App. Div. 6, 8), still, “ such an order has never yet been construed in the courts of this State to take away the title of the corporation to its assets here so far as to deprive the courts of this State of the right to control these assets for the benefit of domestic creditors.” Hammond v. National Life Association, 58 App. Div. 455.

At the time when Bichard Uhtoff brought his action against the Pennsylvania Tanning Company, the courts of this State would, therefore, not have recognized the title of the receivers so as to deprive the domestic creditors of the right of attachment, National Park Bank v. Clark, 92 App. Div. 262. Since our courts, for the purpose of the attachment proceedings, still regarded the title to all its assets in this State as in the corporation, it appears to me at least doubtful whether the receivers could be considered as injured by the warrant of attachment, or whether the receivers could, thereafter bring an action upon the bond of indemnity without an assignment. The plaintiffs have recognized this difficulty and have alleged in the complaint, not that they were injured, but that the corporation was injured by reason of the wrongful attachment, and that the corporation assigned the claim to them. We need not now consider whether the plaintiffs could have set up another cause of action originally accruing to themselves. They have set up a cause of action accruing to the corporation, and their rights under such cause of action were fixed only at the date of the assignment, viz., October 20, 1908.

It seems to me, therefore, that the judgment should be reversed and a new trial ordered, with costs to appellant to abide the event.

Seabuby, J., concurs.