Argued March 6, 1891
Decided April 21, 1891
Charles B. Wheeler for appellant. O.O. Cottle for respondent.
This action is brought to recover of the defendant for failure to return an execution issued upon a judgment in his favor against Lizzie Orr within sixty days after its delivery to him. The delivery of the execution and failure to return it within the time prescribed by statute was admitted, and thus was established prima facie the plaintiff's right to recover the full amount which the defendant was commanded by the execution to make out of the property of the defendant therein. ( Ledyard v. Jones, 7 N.Y. 550.)
The defendant in mitigation of damages asserted that it was not possible for him to have collected the amount of the execution or any part thereof out of defendant's property. It is conceded that the defendant did not have, at the date of issuing the execution or at any subsequent time, any property out of which it could have been satisfied in whole or in part. But the plaintiff insists that by virtue of prior proceedings taken in the action there should have been in the hands of the sheriff applicable to the payment of the judgment moneys sufficient for that purpose; that if there was not, it was solely due to the fault of the defendant and, therefore, not available to him in this action by way of mitigation of damages. It appears that on the 30th day of December, 1887, a warrant of attachment in that action was granted, and on the same day at 3.40 P.M., delivered to the defendant, as sheriff of Erie county; he executed the warrant within two hours thereafter by making a levy on a stock of dry goods belonging to Lizzie Orr, the defendant; the property so levied on was sufficient to satisfy the plaintiff's demand; on the same day the judge who granted the warrant of attachment, on an ex parte application, made an order vacating it; such order was duly served on the sheriff the same evening, who thereupon and on the day following went to the store of Mrs. Orr and formally released the goods from the levy made under the attachment. Thereafter and until January third, she continued to sell goods from the store as formerly, and on that day she confessed judgments in favor of certain creditors, upon which executions were issued against her property to the sheriff, who, on the fourth day of January, levied on the stock of goods of the judgment debtor. Such confessions of judgment were followed by a general assignment for the benefit of creditors, made by the judgment debtor, Lizzie Orr, dated January 4, 1888, and which was duly filed in the county clerk's office on the day following. January 12, 1888, on motion of the plaintiff in Pach v. Orr, an order was made setting aside the order of December thirtieth, vacating the warrant of attachment, which order also contained a provision that "the lien of said attachment is restored." This order was subsequently affirmed at General Term, but on appeal to the Court of Appeals it was modified by striking out such provision, and as thus modified affirmed. The Special Term order was, immediately following the granting thereof, served on the sheriff. While the warrant of attachment, the order vacating it and the order setting aside the order of vacation were in his hands, and, on January sixteenth, he sold the property of the judgment debtor under the executions issued January fourth. The sum realized on that sale was more than sufficient to pay the amount of the execution now in controversy, but the proceeds of the sale were by the sheriff wholly applied on the executions issued on the judgments confessed January third. The granting of the order vacating the attachment followed by the action of the defendant in going to the store and formally releasing the goods from the levy made, operated to destroy all rights which had been acquired by the granting of the warrant of attachment and levy thereunder. Before that order was set aside, other judgment creditors issued executions and caused levies to be made on the property of the defendant, which was followed by a general assignment on her part for the benefit of creditors, and the first contention on the part of the plaintiff is that the order setting aside the first order operated to restore the rights which had been acquired in that property by virtue of the attachment and levy thereunder. It is asserted by the defendant that this question has been passed on by this court adversely to plaintiff's contention. This assertion is founded on the fact that the court modified the order setting aside the order vacating the warrant of attachment by striking out the clause which provided that "the lien of said attachment is restored," and it is urged that this was in effect a determination by this court that it did not rest within the power of the Special Term to restore to the plaintiff the rights lost by the vacation of the warrant of attachment. While this was not necessarily the decision made, it may well have been concluded that the court could grant to the plaintiff on that application no other relief than would be afforded by setting aside the order vacating the attachment, and that the only possible effect of the provision would be to embarrass the intervening rights of third parties, if such there should prove to be. When the warrant of attachment was vacated and the levy thereunder released, the situation of the property was, for the time being, the same as if there had never been a warrant of attachment issued, and a subsequent restoration of that warrant of attachment could not operate to burden the property in the hands of a bona fide purchaser, nor become a charge upon it in the hands of an assignee acquiring the property by virtue of a general assignment for the benefit of creditors. Executions become liens on personal property from the time of the delivery thereof to the proper party to be executed. (Code of Civil Procedure, § 1405.) But no lien is acquired by the granting of a warrant of attachment or by the delivery of the same to the sheriff for execution. The right to subject a debtor's property capable of manual delivery to levy and sale under an execution to be issued on a judgment thereafter to be obtained can only be acquired by the act of the sheriff in taking the property sought to be attached in his actual possession. "No other mode is prescribed. Nothing else will constitute the levy. Until the officer has obtained actual custody he has made no levy, and can make none." ( Anthony v. Wood, 96 N.Y. 180.)
But while we are of the opinion that restoring the vitality of the warrant of attachment did not operate to affect or charge the rights which the assignee had acquired in the property, a question is presented whether it was not the duty of the sheriff under the statute to apply the proceeds realized on the sale under the executions so far as would have been necessary in order to satisfy the execution which is the subject of this controversy.
The effect of setting aside the order vacating the warrant of attachment was to give it validity in the hands of the sheriff as of the date when it was issued. Because of the order of vacation and the act of the sheriff in releasing his levy, the right to retain control of the property and subsequently subject it to sale under an execution to be thereafter issued in such action was lost because in the meantime the title to the property had passed to another.
Therefore, the remaining question is whether it was the statutory duty of the sheriff to give preference in his application of the funds realized from the sale made under the executions to the warrant of attachment first issued to him, notwithstanding the absence of a levy thereunder.
Section 697 of the Code of Civil Procedure provides that "where two or more warrants of attachment against the same defendant are delivered to the sheriff of the same county to be executed, their respective preferences, and the rules, where a levy, or a levy and sale, have been made under a junior warrant, are the same as where two or more executions against the property of the same defendant are delivered to the sheriff to be executed."
Section 1406 provides that "where two or more executions against property are issued out of the same or different courts of record against the same judgment debtor, the one first delivered to an officer to be executed has preference, notwithstanding that a levy is first made by virtue of an execution subsequently delivered."
Under this section, which is substantially a re-enactment of section 14, part 3, chapter 6, title 5, 2 R.S., notwithstanding a sale be made under a junior execution, the sheriff must first apply the proceeds in satisfaction of the execution first delivered to him, although no levy has been made thereunder. ( Peck v. Tiffany, 2 N.Y. 451; Patterson v. Perry, 5 Bosw. 518-535; Atwood v. Lynch, 5 J. S. 5-11.)
While the first section quoted provides for the order of preference where two or more warrants of attachment are delivered to the sheriff and the second where two or more executions are issued to him, section 1407 makes provision for a situation presented by the delivery to the sheriff of executions and warrants of attachment. It declares that "where there are one or more executions and one or more warrants of attachment, against the property of the same person, the rule prescribed in the last section (1406) prevails in determining the preferences of the executions or warrants of attachment, the defendant in the warrants of attachment being for that purpose regarded as the judgment debtor."
Thus by statute it is made the duty of a sheriff to give preference in the application of proceeds of a sale under junior executions to a prior warrant of attachment although no levy be made thereunder. As the warrant of attachment in question came first into his hands, and the effect of the last order made was to give it vitality as of the date when delivered to him it should have been treated in the application of the proceeds of the sale as if he had neglected to make a levy under it, but had instead levied and sold under executions subsequently issued. This the defendant did not do. He has, therefore, failed in his attempt to show in mitigation of damages that the plaintiff was not injured by his action.
The judgment should be affirmed.
My view is that there was no destruction of the lien of the attachment, but that when the order vacating it was set aside, the lien of the attachment was rendered effectual (except as against bona fide purchasers or mortgagees) from the time of the levy of it on the goods, notwithstanding the apparent surrender of the custody of them by the sheriff.
I concur in the result.
All concur, BRADLEY, J., in result.