In People ex rel. Morris v. Randall (73 N.Y. 416) Batterman v. Finn (supra) was quoted with approval, and it was held that a stranger to the restraining orders of the court was in no way affected by or bound to obey them.Summary of this case from Rigas v. Livingston
Argued April 1, 1878
Decided April 23, 1878
Samuel Hand and Samuel H. Randall, for appellant. D.M. Porter, for respondents.
For disobeying and causing to be disobeyed, as it is alleged, an injunction order issued by the New York Common Pleas, the defendant has been fined $3,076.50, and interest, from February 25, 1876, and ordered to stand committed to the common jail until payment of such fine. The question before us is whether the facts authorized the imposition of such a punishment.
It matters not that the defendant's conduct in all the proceedings investigated in the court below may not have been altogether proper. It matters not that he may have been unfaithful as an attorney, and abused the confidence of the court and of his clients. For such misconduct this proceeding was not the proper remedy. In this proceeding he could be punished only for a violation of the injunction order of the court, and we must look at the facts to see if he was guilty of such violation.
In October, November and December, 1873, and January, 1874, there was a fund of about $7,000 on deposit with the chamberlain of the city of New York to the credit of the suit of Hiler v. Hetterich, which would have been payable to Hiler but for facts now to be stated. In December, 1872, such fund being then in existence, Hiler, by an instrument in writing under seal and acknowledging a consideration, sold, assigned, and transferred all his right, title and interest therein to one Haight in trust to pay the expenses and disbursements growing out of the trust, and then to pay certain specified creditors of Hiler, not including these relators; and lastly, after such payments to hold the balance subject to the order of Hiler. Haight accepted the trust and continued to be trustee, making efforts to protect and secure the trust fund, until December 4, 1873, when, by an instrument in writing, he resigned his trust in favor of Charles Dusenbury and the latter accepted the trust, and agreed to assume the position of Haight under the assignment made by Hiler. This change was made by the assent of Hiler, and thereafter Dusenbury acted as trustee until the payment of the fund to him, as hereinafter stated.
Long prior to 1872, the relators, Morris and others, obtained a judgment against Hiler, and caused an execution to be issued thereon against him, which was returned unsatisfied. On the 13th day of October, 1873, Morris and others obtained an order in supplementary proceedings requiring Hiler to appear and be examined on the 17th of October, and restraining him until the further order of the court from disposing of his property. He was examined in that proceeding; and on the 13th day of December an order was made in the same action requiring the chamberlain to appear and be examined as to the property of the judgment-debtor in his possession; and the order restrained him from transferring or making any other disposition of any property belonging to Hiler, or in which he was interested, or in any manner interfering therewith "until further order in the premises." The secretary of the chamberlain was examined under this order. Thereafter, on the 26th day of December, one Riely was appointed in such proceedings, the receiver of the property of Hiler; and in the order appointing him Hiler and his servants, agents, and attorneys were enjoined and restrained from interfering with, or making any disposition of any property belonging to Hiler. All these orders were known to Hiler, Dusenbury, the chamberlain, and Randall. In all these proceedings, Randall in form appeared for Hiler, but really acted to protect the interests of the trustee under Hiler's assignment.
On the 7th day of January, 1874, Randall, acting as attorney for Dusenbury, the trustee, obtained from the court an ex parte order directing the chamberlain to pay the said fund to the trustee. In obtaining this order Randall did not bring to the knowledge of the court the restraining orders which had previously been made, nor the appointment of the receiver. He had previously obtained an order from Hiler on the chamberlain also directing such payment, and, in pursuance of Hiler's order and the order of the court, the chamberlain paid the fund to the trustee; and the relators were not thereafter able to collect their judgment against Hiler.
The alleged misconduct of Randall was in the violation of the order of December thirteenth, restraining the chamberlain, and the order of December twenty-sixth appointing the receiver in which Hiler was restrained, as above stated.
The order restraining the chamberlain was a mere preliminary or intermediate order. It was not intended to be, and could not be permanent. It was in terms to continue only "until further order in the premises;" and such further order was made when the receiver was appointed. That was the final order and the consummation of the supplementary proceedings; and any restraint thereafter desired should have been inserted in that order. As well might a preliminary injunction in an action survive final judgment without the further order of the court. But the chamberlain had the right to pay out this fund for another reason. The order of the Court of Common Pleas of January 7, 1874, ordering him to pay the fund is a sufficient protection to him. He had nothing to do with its procurement, and was in no way responsible for the manner in which it was procured. As to him it was a valid order, and superceded the prior restraining order made by the same court.
The only restraining order remaining was that contained in the order appointing the receiver; and that restrained "Hiler, and his servants, agents, and attorneys." Did Randall violate that order? I cannot perceive upon the undisputed facts that he did. He may have been sharp and unscrupulous, he may have taken advantage of the relators and their attorney, but did he violate the order? That is the sole question. In procuring this fund from the chamberlain, he did not act for Hiler; he acted for the trustee. The fund did not belong to Hiler. He had made an absolute transfer of it to Haight; and in January, 1873, he had no interest whatever in it. The fund was not large enough to pay the debts which the trustee was directed to pay out of it. That assignment may have been, and probably was void as to Hiler's creditors who did not assent to it. ( Goodrich v. Downs, 6 Hill, 438.) They could have assailed it and set it aside, and reached the property, but it was valid as between the parties thereto, and as to all creditors who assented to it. Hiler could not dispute its validity. It divested him of the property assigned as completely as if it were valid against the whole world. He could not revoke or annul the assignment, or do any act to impair or affect the title of the assignee. This was not, therefore, his property; and Randall, in procuring its payment to the trustee, did not act as Hiler's agent or attorney, or interfere with his property. There was no restraint upon the chamberlain, or upon him as attorney and agent of the trustee.
Hiler, when he gave the order on the chamberlain, did not interfere with his own property, but simply did an act not absolutely essential, but which aided the trustee in getting possession of property which belonged to him.
It may be that the transfer of the trust from Haight to Dusenbury was invalid. It certainly was invalid, unless all the creditors interested in it assented to the transfer. If all persons interested in the trust assented, it certainly was valid. If they were all satisfied, no one else could question it. If, however, the transfer was invalid, the title remained in Haight and was still out of Hiler.
But for another reason Randall was not guilty of violating either of these injunction orders. The one in terms operated only upon the chamberlain; and the other only upon Hiler, his servants, agents and attorneys. Neither of these orders restrained Dusenbury or his attorney. Dusenbury was not a party to the action or proceeding in which the orders were made. He did not acquire his rights pendente lite. They were antecedent to the supplementary proceedings. He was an entire stranger to the orders, and hence was in no way affected by or bound to obey them, and Randall, as his attorney, was in the same position. (1 Barb. Ch. Pr., 634; Batterman v. Finn, 32 How. Pr., 501.)
We are, therefore, of opinion that the orders appealed from should be reversed, and that the motion should be denied, with costs.
All concur, except FOLGER and ANDREWS, JJ., not voting. Order reversed, and motion denied.