Williams v. New York Zinc Co.

29 F.2d 167, 1928 U.S. App. LEXIS 2638
CourtCourt of Appeals for the Second Circuit
DecidedNovember 12, 1928
DocketNo. 6
StatusPublished
Cited by1 cases

This text of 29 F.2d 167 (Williams v. New York Zinc Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Williams v. New York Zinc Co., 29 F.2d 167, 1928 U.S. App. LEXIS 2638 (2d Cir. 1928).

Opinion

AUGUSTUS N. HAND, Circuit Judge

(after stating the faets as above). A clearer case of laches than the present can hardly be stated. Complainant brought his suit in the state eourt in 1906, asking for a dissolution of the partnership with Pilling and Crane and for the appointment of a receiver. In 1909 his attorney, Squires, was urging that the sale be held as soon as possible; in 1910, he made bids at the sale. He received a portion of the proceeds as costs, and thereafter, for some 12 years, remained acquiescent, except to protest against the delivery of the receiver’s deed to the Northern Ore Company in 1922. He knew the mining properties were being operated by the defendants, but for years did and said nothing, until 1922, when he first discovered the irregularity of the failure to file a receiver’s bond. On this appeal he relies upon the failure to file a bond, and refers to section 715 of the New York Code of Civil Procedure. That section provided that:

“A receiver, appointed in an action or special proceeding, must, before entering upon his duties, execute and file with the proper derk, a bond to the People, with at least two sufficient sureties, in a penalty fixed by the court, judge, or referee, making the [170]*170appointment, conditioned for the faithful discharge of his duties as receiver. * * *”

The state court, in the suit which wound up the partnership between complainant and Pilling and Crane, disposed of every issue by ordering a sale, confirming the sale, and distributing the proceeds. It is, therefore, quite necessary for the complainant, if he seeks to avoid the bar of the state decree invoked by the defendants, assignees in interest of Pilling and Crane, to establish that the state court was without jurisdiction and the sale was absolutely void.

In support of this contention, appellant cites Mulstein v. City of New York et al., 213 N. Y. 308, 107 N. E. 651, where it was held that a receiver in supplementary proceedings, who had not filed his bond, took no title to the property of the judgment debtor, which accordingly became subject to liens filed subsequent to the date of the receiver’s appointment. But it was not necessary here for the receiver to take title. He was a chancery receiver, in a suit brought for the dissolution of a partnership.

In Keeney v. Home Insurance Co., 71 N. Y. at page 401, 27 Am. Rep. 60, the New York Court of Appeals said of a receiver in a suit to wind up a partnership:

“The title to the property is not changed by the appointment. The receiver acquires no title, but only the right of possession as the officer of the court. The title remains in those in whom it was vested when the appointment was made.” .

So it was held by the General Term of the New York Supreme Court in Holmes v. McDowell, 15 Hun, 585, that the provision of section 715 of the Code of Civil Procedure, requiring a receiver to give a bond with two sureties, did not affeet the jurisdiction of the Supreme Court to appoint a receiver in suits to wind up partnerships, which was a part of its general prerogative as a court of chancery. The court said:

“Having this general power, it follows that the mode and manner of its exercise, unless declared to be jurisdictional, is directory only.”

This decision was affirmed by the Court of Appeals, on the prevailing opinion below, at 76 N. Y. 596.

In Mulstein v. City of New York,'supra, the court called attention to the distinction between that ease and Wright v. Nostrand, 94 N. Y. 31, where an irregularity in the appointment of a receiver in supplementary-proceedings had been held to make no difference, because title was not "necessary to support the action, and said in respect to the situation in the Mulstein Case:

“This ease involves the title to property depending upon the compliance with statutory requirements, and, therefore, does not present the question involved in Wright v. Nostrand, 94 N. Y. 31, in which the receiver’s right to maintain the action did not depend upon the question of title to property.”

In the case at bar the receiver acted, not as the holder of the legal title, but as a mere arm of the court in making the sale.- His failure to file a bond was not jurisdictional, and while the mistake should have been corrected by the court, on a seasonable application to it, the neglect was an irregularity, which did not affeet the validity of the proceedings in the state court, or of the title acquired by the purchaser at the receiver’s sale. Sproule v. Davies, 171 N. Y. 277, 63 N. E. 1106.

■ Moreover section 1242 of the New York Code of Civil Procedure provided that real property must be sold in the county where situated, “by the sheriff of the county or by a referee, appointed by the court for that purpose, who must execute a conveyance to the purchaser,” and section 1243 added that, where a referee was appointed by the court to sell real property, “the court may provide for his giving such security as the court deems just.”

While Johnson was in terms appointed receiver to make the sale and referee to state the accounts, no duty was imposed upon him which he could not have performed as referee. He purported to do nothing as receiver, so far as the record shows; except make a sale and distribute the proceeds as a master in chancery. We hold the neglect to file a bond was a matter not affecting the jurisdiction of the state court, or the validity of the sale. Not only' is this so, because the requirements of section 715 of the Code did not go to the jurisdiction of the court to appoint a chancery receiver, but also because the court under any theory had power to appoint a referee to sell, and Johnson under whatever name he aeted was a referee to sell in fact.

It is also significant that the validity of the sale and of the title of the Northern Ore Company was attacked in McLear v. Balmat, 238 N. Y. 568, 144 N. E. 895, upon the very grounds urged here. We have examined the record in that case, and find that the appellant there relied on Mulstein v. City of New York, supra, as showing that the failure to file a bond was fatal to the conveyance by [171]*171the receiver. While the point is not discussed in the opinion of the Appellate Division, and the Court of Appeals delivered no opinion, there is ground for the contention of the appellee that the New York courts regarded the deed as passing a good title. The decision, therefore, appears to be a precedent substantiating the conclusion we have reached.

The state court validated its sale on notice to all interested parties. It had jurisdiction of the subject-matter, and full faith and credit must be given to its decree. Fauntleroy v. Lum, 210 U. S. 230, 28 S. Ct. 641, 52 L. Ed. 1039.

It is contended by the complainant that the purchaser at the receiver’s sale had no title, legal or equitable, until the delivery of the deed in 1922. But the deeree of the state court in all respects confirmed the purchase and ordered a distribution of the purchase money. This was quite different from the case of a bidder who had not paid all of the purchase money, like that in Cramp v. Dady, 162 App. Div. 321, 147 N. Y. S. 619. In Cheney v. Woodruff, 45 N. Y.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Gasser v. Infanti International, Inc.
363 F. Supp. 2d 508 (E.D. New York, 2005)

Cite This Page — Counsel Stack

Bluebook (online)
29 F.2d 167, 1928 U.S. App. LEXIS 2638, Counsel Stack Legal Research, https://law.counselstack.com/opinion/williams-v-new-york-zinc-co-ca2-1928.