
    Charles E. O’Connor, Receiver, Resp’t and App’lt, v. The Mechanics’ Bank, App’lt and Resp’t.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed November 7, 1889.)
    
    1. Banks—Liability for payment of check after Demand by receiver of PAYEE.
    The executors of an estate made a distribution, of the fund deposited in bank among the several heirs, and gave checks therefor. A receiver of one of the heirs, appointed in supplementary proceedings, demanded his share of the bank before the check passed into the hands of a bona fide holder. Thereafter the bank paid the check. Held, that the allotment and division of the fund was sufficient to entitle the judgment debtor to the share allotted to him which was subjected to the rights of the receiver, and the bank having sufficient notice to put it on inquiry could not pay over the money as it did without incurring the risk of again making payment to the receiver.
    2. Same—Proof necessary in action to enforce such liability.
    In an action by the receiver to recover therefor, the amount of the judgment on which the proceedings in which he was appointed were instituted, the interest thereon, the costs of the proceedings and the receiver’s commissions and disbursements must be proved, as this is all the receiver is entitled to recover.
    Appeal Rom a judgment recovered upon a trial before the court without a jury.
    
      W. G. Beecher, for def’t; Edwin R. Leavitt, for pl’ff.
   Daniels, J.

The plaintiff was appointed receiver of the property of Herbert F. Beecher in supplementary proceedings taken upon the return of an execution unsatisfied, issued upon a judgment recovered against him. The proceedings were taken under subd. 3 of § 2432 of the Code of Civil Procedure. In those proceedings the cashier of the defendant was examined as a witness and from his testimony it was made to appear that moneys had been deposited in the bank to the credit of the estate of Henry Ward Beecher. This had been done by his executors, and they concluded to make a distribution of such money among the persons entitled to receive it under the will of the testator, Henry Ward Beecher. In making this distribution they allotted to the judgment debtor the sum of $2,286.92 and on the 30th of January, 1888, drew their check, payable to his order, upon the defendant for that sum of money, and the check was paid by the defendant on the 10th of March, 1888. The order by which the plaintiff was appointed receiver was made on the 3rd of February, 1888, and on the 8th of the same month his bond as receiver, approved by one of the justices of this court, was filed in the office of the clerk of the county of New York. On the same day a demand was made upon the bank in wilting for the delivery or payment to the receiver or to his attorneys of any and all personal property of any kind, nature or description, money or funds, belonging to Herbert Foote Beecher, and in the custody or under the control of the bank. This demand was further extended by an additional written demand served on the same day, stating the appointment of the plaintiff as receiver and demanding payment to him, “ of the sum of $2,000, amount of the funds of the estate of Henry Ward Beecher, deceased, now on deposit with you, belonging to the judgment debtor, or due to him from you by virtue of a certain check drawn against said funds by Henry B. Beecher as executor of said estate within two or three weeks past to said judgment debtor’s order, and being sent to him, said judgment debtor, by said executor, at Port Townsend, Washington Territory, being for the balance of his share in the distribution of the personal effects of the said estate.”

These demands were disregarded by the defendant and the money paid over upon the presentation of the check and it was because of this payment, with these facts previously brought to the attention of the officers of the bank, that the action was brought by the receiver for the recovery of the money.

It has been objected that his appointment did not authorize the plaintiff to maintain this suit for the reason that notice of the application for it was not given to the judgment debtor, but from a recital in the order it is to be inferred that knowledge of the fact was brought to the attention of the judge, that the judgment debtor was'a resident of Washington Territory, and for that reason the notice required to be given could not be served upon him; and that was sufficient, under § 2464 of the Code of Civil Procedure, to justify the judge in dispensing with that service.

It is no doubt true, as a general legal proposition, that the deposit of money with a banking institution creates no more than the relation of debtor and creditor between the bank and the person or persons to whose credit the deposit is made, but that principle does not control'the rights of the parties to this action, for the moneys which were received by the executors and deposited with the bank were placed there as the property of this estate, and not of the person or persons making the deposit. It was upon the face of the account impressed with a trust in favor of the persons who should prove to be entitled to participate in its distribution. The judgment debtor was one of these persons, and after a division of the money on deposit was made by the executors, and an apportionment of this part of the money, made in favor of the judgment debtor, the check was drawn in his favor for its payment to him, and this allotment and division of the fund was sufficient to entitle him to this part of the money. It in substance became his property and was thenceforth subjected to the rights of the plaintiff as receiver, by the proceedings which had been taken and the demand which was served accompanied by the information contained in it, before either the check itself was paid, or had appeared to pass into the hands of a bona fide holder. That the money did become the property of the judgment debtor by the division which the executors made is sustained by what was held by the court in Van Alen v. The American National Bank, 52 N. Y., 1; Baker v New York National, etc., Bank, 100 id., 31; Viets v. National Bank of Troy, 101 id., 563.

If the bank was not fully apprised of the grounds upon which the receiver claimed to be entitled to this money, it did have sufficient information to render it the duty of its officers to inquire into the circumstances and to ascertain from the executors the true situation of this part of the fund on deposit. And having been placed in that position in this manner, it could not disregard the duty created and pay over the money as it did, without incurring the risk of again making payment to the plaintiff as receiver. When the check was paid, the money so far as it was required to pay the judgment and expenses had become, in fact, the property of the receiver in his official capacity, and as it was paid over in disregard of his rights, after such information had been received by the officers of the defendant as would reasonably, if its indications had been properly followed, have fully informed them of the existence of this right, it was paid without authority and to that extent the plaintiff was entitled to recover.

It was not, however, proved upon the trial what the precise amount was which would be necessary to pay the judgment on which the supplementary proceedings had been instituted, the interest upon the amount, the costs of the proceedings and the commissions and disbursements of the receiver, but the court directed a judgment for the sum of $1,300, until these various amounts could be fixed and determined. This was not authorized. What the plaintiff, in his official capacity, was entitled to recover, was so much money only as would pay the judgment with interest upon it, the costs of the supplementary proceedings, and the disbursements and commissions of the receiver, together with the costs of the action, and that should have been ascertained definitely and fixed by the judgment before it was allowed to be entered, and upon that execution could regularly be issued against the defendant for the collection of the amount. In this particular the judgment was defective, and it should be vacated, and further proceedings directed to ascertain and determine the amount required to pay and satisfy these various items. And when that amount shall have been ascertained, either by a reference or otherwise, then the plaintiff will be entitled to a judgment for the recovery of that sum. These directions will dispose of the appeals of each of the parties, and neither should recover costs of either of the appeals.

Judgment vacated, and further proceedings ordered as directed in opinion, without costs to either party.

Brady, J., concurs; Van Brunt, P. J., concurs in reversal of judgment only.  