Riggs v. Whitney

By the Court.^*—Hilton, J.

It appears that the petitioners, who are not parties to this suit, are the owners of certain premises in College Place, leased to the defendant at $900, and by him underlet to other parties at a rent of $1,300 per annum. Upon supplementary proceedings against the defendant in this cause, John J. Tyler was appointed receiver of his property, and as such there has come into his hands, from the rent of such premises, $250. The petitioners ask that he be required to pay thereout the quarter’s rent due them on May 1st, 1859, amounting to $225. The application is resisted, upon the ground that the petitioners should be left to their remedy by action against the defendant; and, also, that the moneys are needed by the receiver in the prosecution of certain legal proceedings instituted by him for the benefit of creditors, who it is claimed have a right to the fund equal to that of the petitioners.

I think neither of these reasons should be allowed to prevail in a court of equity. The rents which come to the hands of a receiver, from under-tenants of a judgment-debtor, should not be considered as subject to distribution among creditors, until the claim of the original landlord for rent has been extinguished.

The superior equity of the landlord, in such a case, is so obvious, that it ought not to be deemed open for discussion ; especially where, by the original letting, the right of the receiver to continue in the receipt of rent from the under-tenants, must necessarily depend upon his performance of the lessee’s covenant to pay the rent reserved to the landlord.

Ror is the form of the present application open to any objection; but, on the contrary, it has long ago received judicial sanction. (Dixon a. Smith, 1 Swan., 457; 1 Dan. Ch. Pr., 644;

Roe a. Gibson, 7 Paige, 513.) Where property in the possession of a receiver is claimed by a third person, the proper course is to apply to the court from whom he derives his appointment,by petition, for an order that he pay or deliver it over to the party to whom it rightfully belongs; and to attempt to deprive an officer of the court of property in his possession, by suit or other adverse proceeding, without first obtaining leave of the court, would be regarded as a wilful contempt, for which the party instituting the proceeding would subject himself to punishment by attachment. (Angell a. Smith, 9 Vesey, 335; 1 Barb. Ch., 72; Pelham a. Harley, 3 Swan., 291, note)

Order of special term affirmed, with $10 costs, to be paid out of the fund in the receiver’s hands.