Irving National Bank v. Kernan

3 Redf. 1

• Court: New York Surrogate's Court
• Decided: February 15, 1877
• Status: Published

Opinion

The Surrogate.

As these objections strike at the very foundation of the motions under consideration, I deem it my duty first to determine them before considering the merits of the motions, especially as on the former motions I entered into the merits upon substantially the same facts, to the decision of which, reference may be made to ascertain my views upon the merits. It is urged by counsel for the petitioners that the objections above stated are not preliminary in the proper sense of the word, and that a preliminary objection, is one based upon the moving papers and not upon the opposing affidavits. It seems to me that a sufficient answer to this objection is that the essential preliminary objection which is raised, is stated in the petitions in this matter, for they all set forth the same facts as in the prior motions by the receiver for the identical relief sought in these motions, and also the adverse decision. I understand the practice to be quite uniform, where the preliminary objection seems to be insurmountable, to dismiss the proceedings without a consideration of the merits; but where there are serious doubts as to the validity of the preliminary objections, then it is deemed best to pass upon the whole question so as to avoid the necessity of án appeal from an order, based upon the preliminary objections merely; and such examination, and reflection as I have been able to give to these motions have convinced me that the decision of the preliminary objection must be fatal to the petition.

I do not concur with the counsel opposed to the motions, that the inconvenience which would result from the numerous applications that might be made by creditors to set aside these orders, forms any conclusive argument against this application, for if one creditor is entitled to renew the motion by way of experiment, it is the right of every creditor to do the same. The practice seems to be well settled, and for very good reasons, that a motion once denied cannot be renewed, unless leave be first obtained from the court. Dollfus v. Frosch, 5 Hill, 493.) In Willet v. Fayerweather (1 Barb., 72), it is held that new matter which will alone justify the renewal of a motion without leave, must be something which has happened, or for the first time come to the knowledge of the party moving, since the decision of the former motion.

In Hall v. Emmons (39 How. Pr., 187), it is held that a special motion cannot be renewed upon the same, or substantially the same, facts without leave of the court for that purpose obtained, which leave will not be granted, on facts known to the party at the former hearing to the same effect. See also Matter of Livingston, (34 N. Y., 555.) These authorities establish the proposition that these motions could not have been made by the receiver because of the former motions made by him, and denied.

The next question to be determined is, were the former motions made by the receiver, in effect made by the petitioning creditor and others, through their representative, the receiver ?

If the former motion had been made by the executors, would it not have been conclusive as to creditors ?

Suppose a will direct the payment of a legacy before the year expire, and an executor, or administrator exact a bond required by 2 Rev. Stat., 90, § 44, would creditors be at liberty either to resist the giving of the bond, or to move thereafter to open the proceedings ?

Suppose a compulsory accounting be required by the Surrogate pursuant to the petition of a creditor under section 52, (2 Rev. Stat., 92), would a creditor be heard to object to the order of the court for payment of the debt ?

Suppose an executor be called to account on the application of his successor under sections 68 and 69, of 2 Rev. Stat., 93, or a legatee or distributee apply for an advance for support under section 83 of the statute, or a motion be made by a judgment creditor for execution under section 19, where a citation is required to be directed to the executor, or administrator, to. show cause, &c., or an allowance upon the probate of a will be made, or costs be allowed for any proceeding in the way of administration, can it be contended for a moment that all such orders which are permitted to be made, without citing the creditors, may be disturbed on the application of creditors at any future time ? It is clear that the executors, and administrators in such cases are representatives of the estate,' and of the parties interested therein.

Suppose a receiver should bring an action to recover a debt due to the estate, and should be unsuccessful at circuit, and should take an appeal, could a creditor come in, and bring a new suit for the same cause of action ? Most obviously not; still the creditor in such a case, and in the proceedings in this court is not without remedy, but whatever remedy is obtained must be through the receiver, and the receiver’s conduct may be controlled by the court, on the proper application of the creditor interested in the result.

In Porter v. Williams (9 N. Y., 142), it is held that executors under section 17, 2 Rev. Slat., 449, are not the mere representatives of their testator, but are constituted trustees of the property in their hands, as a fund for the benefit of creditors. See also Brownell v. Curtis, (10 Paige, 210, 218). If such be the representative character of executors and administrators, it is quite clear as to the representative character of a receiver. A receiver appointed by the court is appointed on behalf of all parties, and not of the party who procures his appointment. Davis v. Duke of Marlborough, (2 Swanston, 125). In Green v. Bostwick (1 Sandf. Ch., 186), it is held that a receiver holds money for whoever can make out a title to it, and whenever such party is ascertained, a receiver is a receiver for that party. (See also Edwards on Receivers, 3, 4). In Porter v. Williams (above), it is held that a receiver appointed under the code, represents the interest of the creditors, as well as the debt of the debtor. In Mann v. Pentz (2 Sandf. Ch., 271), it is held that the receiver of an insolvent corporation acts for all the creditors and stockholders.

Willard ( Willard’s Eq., 332) says, “the appointment of a .receiver is not for any particular party, but for all who are, or may become interested in the fund.”

In Iddings v. Bruen (4 Sandf. Ch., 417), it is held that the receiver represents the interests of all parties in the property. It is his duty to protect the property intrusted to him to the best of his ability for all those interests, without being controlled by the representative of any one of them.

The force of these authorities establishes the doctrine that the receiver in this case for all purposes of ■protecting the rights of creditors, is their representative, and that whatever he does, they do through him, and that his motions to open, vacate, or modify the orders made by the former Surrogate were made in his representative capacity for them, and that any remedy which he has sought, was sought, as their representative, and that the decision in the receiver’s motions is binding upon them until reversed, and that if the receiver could not have renewed these motions, but must be put to his appeal, the creditors are restricted to the same remedy.

For the reasons above stated I am of the opinion that these motions cannot be maintained, because of the preliminary objection urged by the parties in whose favor the original orders were granted.

Order accordingly.