Opinion
Argued June 22, 1887
Decided October 4, 1887
Leslie W. Russell for appellant. A. Walker Otis for respondents.
We think the appeal should prevail. As for the defendant of record, its dissolution put an end to the action; and at the time of the rendition of the judgment it had neither legal existence, capacity to be sued, nor any property against which a judgment could be enforced, while the receiver, who by authority of law had taken its effects, had not been made a party to the action in which the judgment was recovered. It is, therefore, plain that the funds in his hands should not be affected by it, unless by interference or otherwise, under the direction of the court appointing him, he has made himself responsible for the final result of the litigation between the parties. ( McCulloch v. Norwood, 58 N.Y. 563.) His authority to do the acts relied upon by the respondents was derived from the court from whom he received his appointment, and its exercise was necessary for the protection of property which had come to his hands. He was directed to argue, for the plaintiff in error, the case as it was presented to the appellate court, and he was allowed to intervene for the mere purpose of protecting such interest as he might have, and for the purpose of being heard on the argument. He had nothing to do with any proceeding in the action, nor with the cause of action. He was confined to the record of those proceedings, and could only submit the judgment of the inferior tribunal to re-examination. He was required to do this because of his interest in the property held by the sureties, and his duty to protect it as increasing, if their lien was discharged, the assets in their hands. He would also, it may be assumed, have been bound by the judgment rendered by the Supreme Court, had it been adverse to the plaintiff in error. But the writ of error asserted no claim or demand in behalf of the plaintiff in error. It could not in any way act upon the parties; it acted only upon the record; and because, as the result shows, the receiver successfully pointed to errors in the record which required the reversal of the judgment, it is now claimed that he is bound by a judgment upon the merits, rendered upon a trial in which he did not participate, in an action to which he was not a party and over which he neither exercised nor assumed control. There is no equity in such a result, and it is not required by the cases cited by the respondent, viz.: Castle v. Noyes ( 14 N.Y. 329), and Jay v. De Groot (2 Hun, 205). In the first case the master in person was a party in one action, and in the other his servant; but the master conducted the proceedings as was his duty, and the decision was put upon the familiar doctrine that the judgment of a court of competent jurisdiction upon a question directly involved in the suit is conclusive in a second suit between the same parties, depending on the same question. It can have no application here, where the question is whether the appellant was a party in fact. In the second there was a motion in a foreclosure case to enter judgment for deficiency. It had been once made and denied. The appealing party, although not a party to the record, was a party in interest, and had been heard both by affidavit and counsel, and for that reason was held to have been an actual party to the motion, and subject to the rule that a motion once decided is final, unless leave is given to renew. If the appellant were asking to reargue the questions disposed of on the writ of error, the general rule thus stated might apply, he having been once heard. Such, however, is not the object of the present proceeding. The reversal destroyed the effect of the judgment, and the original cause of action was no longer merged, but let loose, and the parties litigant were restored to the same condition in regard to it in which they were prior to its rendition. The subsequent trial and judgment concerned that, and had nothing to do with the writ of error. As to the cause of action, the receiver has not only not been heard, but he had no right nor opportunity to be heard respecting it. The sole object and reason of his intervention on the hearing of the writ of error was to protect the property in his hands from an incumbrance which had no connection with the subject-matter of litigation in the original suit, but which grew out of a distinct and collateral act of the company after judgment in that suit, and in aid of its endeavor to avoid it. With those proceedings the court in Tennessee had nothing to do. The receiver committed no act within its jurisdiction, nor was the property which he sought to release ever under its control. It at no time acquired jurisdiction over him, nor over the funds now sought to be reached by force of its adjudication, and we are unable to find any ground upon which the case before us can be made an exception to the general rule that a person is not estopped by a judgment to which he is not a party.
The order appealed from should, therefore, be reversed, and the order of the Special Term affirmed, with costs of the appellant in all courts to be paid by the respondent.
All concur.
Ordered accordingly.