In re Herbst

17 N.Y.S. 760, 70 N.Y. Sup. Ct. 247, 44 N.Y. St. Rep. 173, 63 Hun 247, 1892 N.Y. Misc. LEXIS 503

• Court: New York Supreme Court
• Decided: February 18, 1892
• Status: Published

Opinions

O’Brien, J.

William Herbst and Morris Morrison applied at special term for leave to sue Henry W. Gray, a receiver of the firm of Levy Bros. & Co., or to interplead him as one of the defendants in a suit to be brought to foreclose alien upon chattels. By their petition the appellants claim that they performed work, labor, and services as tailors in the manufacture of certain clothing, to the value of $2,576.80, at the request of Levy Bros. & Co.; that the said firm agreed that they should have a general lien upon 315 coats, delivered to them to be made up; that they did the work on the coats, but have not been paid. In a suit brought by Hardt and others against Levy Bros. & Co. and others, Gray was by an order of this court, dated May 21, 1891, appointed the receiver of the said copartnership firm, and claims all the property by reason of such appointment. The affidavit which accompanies the petition states that a proceeding is now pending in this court to, punish the petitioners for contempt, for failure to turn over to the receiver the same goods and chattels on which they claim a lien, and that the motion is made in the action of Hardt against Levy, in which the receiver was appointed. It is, upon these facts, insisted by plaintiffs that nothing appears to justify the order made by the justice below, and that the denial of petitioners’ application was a refusal to allow them, having a legally undisputed claim, from prosecuting the remedy which the law prescribed, and from seeking in the courts an enforcement of their legal and constitutional rights. The receiver, in his affidavit, shows that the object of the action in which he was appointed receiver is to prevent multiplicity of actions, and to ascertain and adjudicate in that suit the claims of all persons in respect to the property attached by the sheriff, or held under claim of lien. In respect to the delivery of receivership property to the receiver, or the surrender of receivership property by the receiver, many applications have been made by this receiver in the suit in which he was appointed, and the court, in the exercise of its discretion, deemed it wiser to retain all such questions for settlement in the principal suit, and not to require or permit other actions to he brought. With respect to the property held by the appellants, such an application was made by the receiver, and to forestall the decision of the court the appellants made their motion for leave to bring on independent action to foreclose their lien. Such an action as proposed is equitable in its nature, and one which can be established and enforced by a court of equity, or the court can, in an equitable proceeding, require the claimant to submit his claim in the principal suit, and can therein give such relief to the petitioner as he may show himself entitled to. Upon these applications at special term the court has held that, even with regard to claims of a legal nature, triable by right by jury, it will, in its discretion, permit such an action to be brought. This rule has not, however, been extended to actions such as this one, which is of an equitable nature, for the reason, as stated, that any claim or lien can be disposed of in the principal suit without injury to any of the claimants’ legal or constitutional rights, and thus secure the object of the principal action by preventing a multiplicity of suits. The theory upon which such action of the court is based is that, where the court has taken possession of property, and appointed a receiver, it has power to try all adverse claims in the principal suit. Such a disposition of adverse claims is in accordance with the former equity practice, which has not been taken away nor superseded by statute. And, it appearing by the record that a proceeding has actually been brought by the receiver to have the claim of petitioners determined, it was proper for the court, in the exercise of its discretion, to deny the leave to sue the receiver which was applied for. We think that the order appealed from should be affirmed, with $10 costs and disbursements.