
    Huldah H. Clapp v. Robert C. Clapp et al.
    
    
      (Supreme Court, General Term, First Department,
    
    
      Filed November 7, 1889.)
    
    Receiver—Limit of liability upon appointment of his successor.
    Where upon notice to the parties a receiver is directed to transfer assets to his successor [in the office, the only liability remaining] upon him is to account for and pay over to his successor so much as the estate has been diminished or lost by his inattention, carelessness or misconduct, and before any direction for payment of the loss can be made it must be ascertained by proof what loss has resulted from his misconduct. He cannot be held liable for assets or their value, as they passed into the hands of his successor under the order of the court.
    Reargúment of an appeal previously heard and decided by this court.
    
      Wheeler H. Peckham, for app’lt, Thos. B. Rand, receiver; A. C. Brown, William Mitchell and George C. Holt, for resp’ts.
   Daniels, J.

This case was very fully considered when it was before this court on the first hearing of the appeal, Clapp v. Clapp, 49 Hun, 195; 17 N. Y. State Rep., 39, and a reexamination of the evidence contained in it fails to ^entitle the respondents to any greater measure of relief than that which has already been allowed. The property in the hands of the receiver was directed to be transferred and delivered over to his successor. This was done under an order of the court before which the parties to the action had an opportunity to be heard. And having been made in that manner, it protected the receiver, who was removed, in the delivery of the assets of the estate, so far as they remained under his control, to the person who succeeded him in the same office. This subject was examined in Herring v. N. Y., Lake Erie, etc., R. R. Co., 105 N. Y., 340 ; 7 N. Y. State Rep., 547, and in Sullivan v. Miller, 106 N. Y., 635; 11 N. Y. State Rep., 312, and that effect was given to orders obtained from the court in this manner.

After the property was delivered over pursuant to this direction, it was in the hands of the succeeding receiver for the benefit of the creditors of the estate. They were entitled to resort to it for the payment of their debts, or so much of them as the assets would be able to pay. What was left against the appellant, who was the preceding receiver, was a liability to account for and pay ■over to his successor so much as the estate had been diminished or lost by his inattention, carelessness, or misconduct; and no authority has been found, or cited, imposing any greater degree of liability than this upon him. To that extent he should, as has already been held, account and indemnify this estate for the loss it has sustained through his mismanagement and misconduct.

But before any further direction can be made for the payment of the loss so sustained, it must be ascertained by proof showing how far the assets diminished in value, or were lost, owing to the misconduct of the appellant as receiver. The proceeding in the end, so far as he may be liable in case of his non-payment of the amount in this manner to be proved against him, will be one for his punishment by way of contempt; and that never is permitted in a civil proceeding without the fact being first established that the party has become liable to such punishment, and the extent to which it may be inflicted upon him.

The directions which have already been given for the ascertainment of the extent of the loss, and of the liability of the receiver to respond, are as favorable as the circumstances in the case will justify. He can very obviously not be held liable for the assets, or their value, as they passed into the hands of his successor under the order of the court. Their full benefit was secured to the creditors by this transfer to his successor, and all that remains to complete the proceeding is to ascertain the loss occasioned to the estate through the misconduct of this receiver, and when that has been ascertained, to provide, in the manner the law will allow that to be done, for its payment. The extent of the liability is reasonably free from doubt, and the proceedings By which it is to Be enforced and completed seem to be free from all reasonable ground of uncertainty. Ho change can be made in the direction which has already been given, and an order ■should be entered reaffirming that direction, with costs.

Brady, J., concurs.  