Brand v. Milbank

PER CURIAM.

The defendants Ernst Lipman, Edward Fried-lander, Herman Hildersheim, and another person, sued as John Doe, were partners under the name of Lipman & Co., and engaged in business at Dundee, Scotland. All of the members of the firm are subjects of Great Britain, none of them residing in this state. Ludwig A. Gutman, defendant, was the agent of the firm in the city of New York. On divers dates, between April 1, 1892, and December 14, 1892, the firm shipped from Dundee a large number of bales of burlaps, consigned to themselves at New York. Some of the bills of lading under which the goods were shipped were assigned by Lipman & Co. to the plaintiffs as security for bills of exchange drawn by Lipman & Co. on and accepted by plaintiffs. Bills of lading for other bales of burlaps so shipped were assigned to other banking firms and corporations as security for like acceptances. The New York agent of Lipman & Co. was directed to turn over the avails of the various shipments so made to the bankers holding assignments of the bills of lading so assigned to them as security for the sums loaned through their acceptances. On December 14, 1892, Lipman & Co. became insolvent, and suspended payment. Gut-man, their New York agent, collected after that date various sums from purchasers of the bales so shipped and pledged, and deposited the amounts collected to the credit of Lipman & Co. in the Western National Bank of this city. Immediately after the failure of Lip-man & Co., nine banking firms and corporations began actions in this state, in which attachments were issued and delivered to the sheriff of the city and county of New York, who attached the money standing to the credit of the firm with said bank, and also certain other property. On or about February 24,1893, this action was begun, all of the banking corporations, the partners of the banking firms, and the members of Lipman & Co. being made parties. The action was brought for the purpose of determining the rights of all the parties in the fund held bv the bank, and, among other relief, a receiver was prayed for. April 6, 1893, Samuel W. Milbank was appointed receiver by an order containing the following provision:

“Ordered, that the sheriff of the city and county of New York be, and is hereby, directed to transfer to such receiver all property formerly belonging to said defendants composing the firm of Lipman & Co., levied upon or taken into his possession by virtue of attachments issued at the suit of any of the parties to this action, without prejudice, however, and subject to the liens of the respective attachments referred to in the complaint herein, according to the dates of the levies thereof, respectively, and without prejudice to any and all rights of said sheriff to fees or poundage by virtue of said several attachments.”

A copy of the order appointing the receiver was served on the sheriff, and a demand made that he pay over all moneys taken by him under the attachments. On May 22,1893, an order was granted and entered which contained the following provision:

“Ordered, that the defendant John J. Gorman, as sheriff of the city ,and county of New York, do forthwith pay over to Samuel W. Milbank, the receiver heretofore appointed herein, any and all moneys heretofore collected or received by him under any warrants of attachments or executions heretofore issued to him against the property of the defendants Ernst Lipman and others, composing the firm of Lipman & Co., after deducting the said sheriff’s fees or poundage under the said several attachments; without prejudice to liens, if any, under the said attachments.”

The receiver and certain of the defendants appeal from that part of the order which permits the sheriff to retain the amount of his fees and poundage.

The title to these moneys is in dispute. Every one of these banking firms and corporations asserts that a definite amount of the whole sum deposited in the Western ¡National Bank arose from the sale of goods owned by it, and to which Lipman & Co. had no title. If a sheriff levies on or attaches the property of A., on a process against B., under the belief that the property belongs to the latter, he is not entitled to collect his fees and expenses out of the property so wrongfully taken, but he must look for his compensation to those who employed him; or, if property of a debtor is attached or taken in execution on which there is a prior lien, it must be first satisfied, and no part of the sheriff’s fees can be deducted from the fund realized before payment of the lien. If the remainder of the ■sum realized is insufficient to pay the sheriff, he must look to the plaintiffs in the writs under which he proceeds. In the case at bar, if these various banking concerns hold the legal title to these goods, or establish liens thereon, their claims must be first satisfied before any part of the same can be applied to the payment of charges of the sheriff; and it was error to permit him to withhold his fees from the fund before it was determined that any part of it was subject to be taken by virtue of the writs held by him. That part of the order which is appealed from must be reversed, with |lo costs and printing disbursements.