
    WILLIAM S. KEILEY, as Receiver, &c., Plaintiff and Respondent, v. CHARLES DUSENBURY, Impleaded, &c., Defendant and Appellant.
    Receiver, &c., assignee for the benefit of creditors, &c. —Successor to, how appointed.—Money paid into court, protection of.—Effect of wrongful payment.—Parties RECOVERING THE SAME, ACQUIRE NO TITLE THERETO.-TRIAL BY JURY, WAIVER OF.
    Money paid into court and held in its custody, is a deposit of such a character that it is a stringent duty of the court and all its officers to protect- the same by all the lawful means within their power, from fraudulent diversion or misapplication.
    When a wrongful payment of money, in the custody of the court, has been procured by collusion or by fraudulent concealment or false representations, the parties to such acts, or those profiting thereby and obtaining the money, acquire no legal title to the same, and the person rightfully entitled thereto has his remedy by action to recover the money, &c., and in some cases, by proceeding summarily against the wrongdoers.
    The recitals in an ex parte order (directing the custodian of the money to pay the same), as to who is or who appears to be the person entitled to the same, do not protect the wrongful recipient of the fund from liability for the same to the person rightfully entitled to it, when the order has been procured by collusion or fraud practiced upon the court.
    Such an order has none of the elements to constitute a bar, as res adjudkata against the lawful claimant.
    The resignation of an assignee for the benefit of creditors must be made to the supreme court. Its acceptance and the discharge of the assignee from the trust, and the appointment of his successor, are all matters for the action of said court (1 S. S. 730, §§ GO, 70, 71; Leggett v. Hunter, 19 IV". Y. 459; Cruger v. Halliday, 11 Paige, 819; Thatcher v. Canda, 3 Keyes, 157).
    The property and trusts created bj'’ such an assignment cannot be transferred by the resignation of the trustee in favor of some one else, unaccompanied with the consent of the cestuis que trust or the order of the supreme court.
    A receiver is clothed with no powers to waive the equitable rights of the judgment creditors, for the protection of whom he was appointed.
    Where a party proceeds to a trial before the court without a jury, and without objection or a demand for a trial by jury, be must be deemed to have waived his rig]it to a trial by a jury, if any he had (Black ». White, 37 N. T. Superior lie-ports, 330).
    Before Curtis, Ch. J., and Sanford, J.
    
      Decided May 8, 1877.
    This is an appeal by the defendant Busenbury, from a judgment entered against him personally, for §3,076.50.
    It appeared at the trial, that on January 24, 1857, Peter Morris, John A. Morris, and James Gumming, became and ever since have remained, judgment creditors of Selah Hiler, one of the defendants, and that on November 7, 1873, by the order of the supreme court in a proceeding then pending, this defendant, Selah Hiler, became entitled to a certain fund or sum of §7,187, in the custody of the chamberlain of the city of New York, to be drawn out only upon the order of the court of common pleas.
    It further appeared that on November 7, 1872, an instrument purporting to bean assignment of this fund to one George W. Haight for the benefit of certain creditors, was executed by the defendant Selah Hiler.
    Upon application of the above named judgment creditors, who are not named in this assignment, the plaintiff, on December 19, 1873, was duly appointed receiver of all the debts, property, equitable interests, and things in action of the defendant Hiler, with leave to sue for and recover any of his estate. The plaintiff duly qualified as such receiver, and has taken the steps necessary to vest in himself as such receiver all the title and estate of Hiler to this fund of $7,187, which Hiler had on December 19, 1873.
    On or about January 8, 1874, this fund of $7,187 came into the hands of the defendant, Dusenbury, with notice that the judgment creditors above named claimed the whole or a part of the fund, and with knowledge that the plaintiff was appointed such receiver, with leave to sue for and recover this money.
    The testimony in the case does not show that Dusenbury received any direct assignment of this fund or the title thereto from any one, but he claims that his position is that of an assigmee under the assignment from Hiler to Haight, by the resignation of the latter in his favor. It appears from the testimony of Dusenbury himself that he received the entire fund or sum of $7,187, and there is no evidence that he has parted with any considerable portion thereof, except the sum of $1,000 to the defendant, Sackett.
    There is no evidence that the persons named in the alleged assignment assented to the removal or resignation of Haight, and there is testimony that one of them did not so assent.
    This action is brought by the. receiver to have that ' assignment set aside as void and fraudulent as against these judgment creditors, and that the defendants other than the chamberlain be made liable for the money received by each respectively.
    In October, 1873, Hiler was served with an order for his examination, and was examined at various times as a judgment debtor thereunder down to December 19, 1873, when the plaintiff was appointed receiver.
    On December 13, 1875, the defendant Hiler, while still forbidden to dispose of his property, and more than a year after he had executed the alleged assignment covering the fund to the defendant, Haight, obtained by S. H. Randall, Esq., his attorney, an absolute order, ex parte, commanding the chamberlain to pay this fund to Hiler himself. On the same day, and before the money could be drawn from the chamberlain by Hiler, the judgment creditors and real parties plaintiff in interest herein obtained an order to examine the chamberlain, and among other things forbidding the chamberlain to pay this money over to the defendant Hiler.
    On December 15, 1873, the defendant Dusenbury claimed this fund by S. H. Randall, Esq., the same attorney who two days before had obtained the order directing the chamberlain to pay this fund to the defendant Hiler, and the same day he obtained an order to show cause why the order restraining the chamberlain from paying said fund to Hiler or his order or to the defendant Charles Dusenbury, trustee, should not be vacated. This was obtained in part upon the affidavit of Dusenbury, saying he learned on December 13, that the attorney for the plaintiffs (the judgment creditors herein), had obtained a stay restraining the chamberlain from paying over the fund, which Dusenbury prays may be vacated. An affidavit of Mr. Randall was read on this application, stating he had been the attorney for the trustee Haight, under the assignment, from May, 1873, and that he was now the attorney for Dusenbury as trustee in whose favor Haight had resigned.
    Upon that motion the defendant Dusenbury sought a determination as between the judgment creditors and himself, as to the title to the fund in controversy, and his motion to allow the money to be paid to himself as trustee, was denied with costs, December 23,1873, and the order denying it was served on Dusenbury’s attorney the same day.
    The defendant Dusenbury appeared and opposed the motion of the judgment creditors for the appointment of a receiver, and filed his own affidavit, and the papers showing his alleged title to this fund in opposition, but the motion was granted, and the order continued the injunction restraining Hiler and his servants,, agents and attorneys from interfering with this or any property of Hiler’s.
    On January 7,1874, the defendant Dusenbury, acting through his attorney, S. H. Randall, Esq., obtained an ex parte order from the court of common pleas directing the city chamberlain to pay over this fund to himself. Under this last mentioned order, the chamberlain paid the fund to Mr. Randall, who at once paid it to his client.
    In applying for this order for the chamberlain to pay over the fund, the existence of the order of December 13, 1873, restraining the chamberlain from so paying it, and also the existence of the order of December 33, denying Dusenbury's motion to allow the fund to be paid to himself, was not disclosed to the court.
    On the trial at special term the court found that the alleged assignment from Hiler to Haight was made with intent to hinder, delay, and defraud the creditors, of the assignor Hiler, and these judgment creditors, Morris, Cummings and Morris, and that it was fraudulent and void; and that the defendant Dusenbury never became vested with the title of the money receive^ by him, as alleged trustee, from the city chamberlain ; but wrongfully, and fraudulently procured possession of the same, and that the plaintiff, as receiver, was entitled to a judgment against the defendant Dusenbury for the amount of the judgment, in favor of the judgment creditors Morris, Commings and Morris, against Hiler, with interest thereon and costs.
    From this judgment the defendant Dusenbury appeals.
    
      Hall & Blandy, attorneys for appellant; Ira D. Warren, of counsel.
    
      
      L. A. Gould, attorney for respondent; D. M. Porter, of counsel.
   By the Court.—Curtis, Ch. J.

The defendant Dusenbury has acquired his rights, if any, to the fund in question, in one of two ways. He either derived his right to it, or to the custody of it, tinder the order of the court of common pleas, made January, 1874, which recites that he appears to be the person having the legal title and right to the possession of it, and which also directs the city chamberlain to pay it to him ; or else he acquired it, under the assignment for the benefit of creditors made by Selah Hiler to the defendant Haight, November 7, 1872. Haight is claimed to have resigned this position as assignee in favor of the defendant Dusenbury.

Money paid into court, and held in its custody, and to be paid out upon its order, is a deposit of such a character,' that it is a stringent duty not only of the court but of each and all of its officers, whether they are attorneys, clerks, or receivers, to protect it by all the lawful means in their power from improper or fraudulent diversion, or misapplication. When a wrongful payment of money in the keeping of the court is procured by collusion, and by fraudulent concealment, or false representations, the parties to such acts, or those profiting by them, acquire no legal title to the fund, and the person rightfully entitled to it has his remedy by action, and in some cases by proceeding summarily against the wrong-doer.

The recitals in an ex parte order, as to who appears to be the person entitled to the fund, and the direction to the custodian of it, to pay it to such person, -when the order is procured by collusion and imposition upon the court making the order, do not protect the wrongful recipient of such fund from liability for it, to the person rightfully entitled to it. An order of this character, made without notice, has none of the elements to constitute a bar, as res adjudicata against the lawful claimant.

On December 19, 1873, the plaintiff was appointed receiver of all the debts, property, equitable interests, and things in action of the defendant, Hiler, under proceedings supplementary to execution. This appointment was made upon the application of these judgment creditors, and he thereupon duly qualified as such receiver, and became vested with the right to the fund in question, subject to the rights, if any, of the defendant Dusenbury.

On January 7, 1874, the defendant Dusenbury, through his attorney, Mr. Randall, applied to the court of common pleas, for the order directing the fund in court to be paid to him. At the time of making this application, both he and his attorney had notice that the judgment creditors of Hiler claimed the whole or a part of this fund, and that the plaintiff was appointed receiver, with leave, among other things, to sue for, and recover this money. He also knew, at that time, of the existence of the orders of the court of common pleas of December 13, 1873, and of December 19, 1873, the first restraining the city chamberlain from paying it out, and the latter denying his own application that the fund be paid to himself. Yet, with a knowledge of the existence of these facts, both on his part and his attorney’s, and by going before a different judge from' the one who had made these existing orders, and by not disclosing their existence, this ex parte order for the payment to-himself of the fund, with its recital of his rights to it, was obtained.

The steps taken by this defendant, and his concealment of these previous orders, were obviously acts in bad faith on his part, for the purpose of getting this money into his possession, in the face of the existing orders of the court to the contrary. It is impossible in such conduct to see anything but a gross abuse, accomplished by wrongful acts, and which cannot in any aspect protect this party to it and the recipient of the. money thus obtained, from being made liable for it to the person lawfully entitled to it, as the receiver of the defendant Hiler, and the representative as such of these judgment creditors.

But a claim to this fund is made by the defendant Dusenbury, irrespective of such title as may have been acquired under the order that the city chamberlain pay jt to him.

It is suggested that he succeeded to an interest in it as the successor of the defendant Haight to the trust created by the assignment for the benefit of creditors, made by Hiler to the defendant Haight, and which the latter resigned in favor of Dusenbury, and that the latter is thereby made to stand in the same position as the original assignee. If this assignment to Haight had any validity, it is difficult to perceive how the execution of the trusts under it can be transferred by a mere resignation of the trustee, in favor of some one else, unaccompanied with the consent of the cestiois que trust, or the order of court who is thereupon to stand in his place. If Haight, the assignee, wished to resign, there should have been a petition to the supreme court, for the acceptance of his resignation, and a discharge from the trust, arid the appointment of the new trustee in his place' should have been made by the court (1 R. S. 730, §§ 69, 70, 71; Leggett v. Hunter, 19 N. Y. 459 ; Cruger v. Halliday, 11 Paige, 819 ; Thatcher v. Canda, 3 Keyes, 157). The evidence in the case fails to show that the defendant Dusenbury succeeded to the status of Haight as assignee under the assignment, or became legally vested with any rights or interests thereunder to the fund in question.

There is also evidence justifying the finding of the court, that this assignment was made by Hiler to delay and defraud creditors, and was fraudulent and void as against the creditors of Hiler. Being an insolvent judgment debtor, he assigned his property, this fund, for the benefit of some of his creditors, leaving out these judgment creditors, whom the plaintiff, as receiver, represents, and directed the surplus to be held subject to his order. This is a trust for the use of the assignor, and renders the assignment void upon its face (Goodrich v. Downs, 6 Hill, 438).

However inconsiderate and uncalled for were the statements made, probably in ignorance of the facts, by the plaintiff in respect to this fund, after the making of the order for its payment by the chamberlain, he, as a receiver and as an officer of the court, was clothed with no powers to waive the equitable rights of these judgment creditors he was appointed to protect, and which was also known to Dusenbury.

The case shows that the defendants proceeded to the trial before the court without a jury, and without objection to so proceeding, and without demanding that the trial be had before a jury. Under such circumstances and not raising any objection until the case came on for argument before the appellate court, the defendants must be deemed to have waived such rights, if any they had (Black v. White, 37 N. Y. Superior Ct. R. 320).

It was strongly pressed at the argument, that Dusenbury even if the assignment was held void, should not be subjected to personal liability for the funds he had paid out. If Dusenbury was the assignee, and acted in good faith, it would be in accordance with well settled principles that he should be thus protected. But, as it is impossible to come to the conclusion that he either was assignee, or acted in good faith, he is not entitled to such protection. Nor does the disposition of such portions of the fund as he has parted with, appear to be of a character that calls for the equitable interposition of the court on his behalf.

The judgment appealed from should be affirmed, with costs.

Sanford, J., concurred.  