
    National Park Bank v. Goddard et al.
    
    
      (Supreme Court, General Term, First Department.
    
    November 13, 1891.)
    1. Injunction—Multiplicity of Suits—Attachment—Conflicting Claims.
    After a creditor of an insolvent firm of wholesale clothiers had attached their entire stock, other persons claiming to be creditors for goods sold, whose claims had not matured, assumed to rescind the sales as having been induced by fraud, and replevied the goods, which they took from the possession of the sheriff, There were more than 50 of these actions, some claiming cloth, some linings, and others trimmings; so that entire garments were replevied by persons who had furnished the buttons thereon, and others were sought to be taken by several different creditors. Held, that the attaching creditor may maintain a suit to restrain further proceedings in replevin, to have a receiver appointed, and compel the litigation of all the adverse claims to the property in one suit.
    2. Same—Replevin—Trial by Jury.
    It cannot be objected to this suit that plaintiffs in replevin are thereby deprived of a trial by jury; for, if they are as matter of right entitled to such trial, issues may be framed by which they may have the benefit of it.
    8. Same—Goods in Original Pieces.
    The fact that the goods sought to be recovered by some of the creditors remained in the original pieces, and had not been manufactured, is not sufficient to entitle them to maintain the actions in replevin while the rest of such actions are enjoined.
    4. Receivers—Disposition of Property—Orders of Court.
    The receiver in such suit, on taking possession of the stock, learned that there were conflicting claims to specific articles of the manufactured clothing; that the season for the sale of such clothing had nearly passed; that keeping it would involve expense, and also deterioration of the clothing; and that the debtor had kept a record of all goods and materials used, whereby they could be traced into the completed garment, and their value identified in the proceeds of the sale of the latter. Held, that it was proper for the court to direct the receiver to sell the manufactured clothing at once, and hold the proceeds subject to its further order.
    5. Same.
    The receiver also reported that there were some goods cut out, but not made up, which, when completed, would sell for more than the cost of making them up; and that there were other unfinished garments in the hands of workmen, who claimed a lien thereon. Held, that it was proper to order him to have the goods cut out, made up, and sold, and to allow him to settle with the workmen claiming liens at his discretion.
    Appeal from special term, New York county.
    Suit by the National Park Bank against Warren N. Goddard and others for an injunction and the appointment of a receiver. Plaintiff, as a creditor of Levy Bros. & Co., who were insolvent, attached its debtors’ stock of goods, whereupon actions of replevin were instituted by defendants to obtain possession of such goods, and it was to restrain these actions that this suit was brought. From an order granting the injunction and appointing a receiver, and from a further order directing the receiver to sell certain goods, defendants appeal.
    Orders affirmed.
    Argued before Van Brunt, P. J., and Barrett, J.
    
      E. F. Dwight, for appellants Oelberman and others. Gibson Putzel, for Raritan Woolen Mills and others. Benno Loewy, for appellants Haas and others. Butler, Stillman & Hubbard, for appellants Juillard and others. Otto Horwitz, for respondent.
   Van Brunt, P. J.

Levy Bros. & Co. were a limited partnership, engaged in the manufacture and sale of clothing in New York, and, being indebted to the plaintiff in a large sum of money, their property was attached at the suit of the plaintiff by the sheriff, who took into his possession their stock of goods and some other property. At that time the defendants herein, other than the Levys and the coroner, claimed to be creditors of the insolvent firm for goods sold and delivered, but their claims had not matured. As soon as the sheriff had-levied upon and taken possession of the firm’s property, these creditors, claiming that the goods sold by them to the Levys were obtained from them by fraud, assumed to rescind the sales, and commenced actions in replevin to recover the goods they had respectively sold. The coroner thereupon took the goods out of the sheriff.’s- possession. Some 40 or 50 different actions of this nature were thus commenced. The goods sought to be replevied were cloth, linings, trimmings, and other materials which had been sold by the plaintiffs in the replevin suits to the Levys, and which had to á great extent been made up by the Levys into clothing; the cloth bought from one merchant being combined with the linings bought from another, and the trimmings furnished by another, to form the garment as it existed at the time of the levy of the attachment by the sheriff. Each plaintiff in the replevin suits claimed • certain goods, in whatever shape he could find them, whether in the piece or made up into garments. Entire garments were claimed by the merchant who sold the buttons or lining, or who sold the cloth or furnished other parts of the material, and at the time that this action was commenced were in the act of seizing upon and taking away property, some.of which had formerly belonged to them, and some of which they had never owned; the claim of the plaintiffs in the replevin suits being that, these goods having been obtained by fraud, they had the right to follow them in any form that they might assume through the interference of others. The respondent thereupon commenced this action for the protection of its lien under its attachment, and to procure in one suit a determination of all the adverse and conflicting claims "upon the attached property, and for an injunction and a receiver; averring that it was necessary for the protection of its lien that the attached property be held or sold for the benefit of all the lienors or claimants thereof. An order to show cause why a receiver should not be appointed having been made, an order was made temporarily enjoining the defendants from pursuing their actions in replevin, and the court appointed a receiver, two orders having been entered in respect thereto, and from these orders these appeals are taken.

It is urged upon the part of the appellants that the complaint does not disclose equity sufficient to authorize the relief granted by the order; and that multiplicity of suits is not alone a sufficient ground for the interposition of a court of equity, but that there must be some additional equity, of which the plaintiff is unable to avail itself at law, or which is a distinct ground of equitable cognizance, such as accident, mistake, fraud, or discovery; and that in any event it must be shown that there is a common right at stake among the defendants, or a common property involved in dispute. Undoubtedly, a part of this proposition is well founded, but the limitation of the interference of equity to cases of accident, mistake, fraud, or discovery would seem to deprive that branch of jurisprudence of the most important part of its jurisdiction; and, in the consideration of the questions presented upon this appeal, it may be proper to call attention to the manner in which equitable interference has-been called into existence by the necessities of the case, the cardinal principle being that the party had no adequate remedy at law, which is the foundation of all equitable interference.

In order to obviate many defects in proceedings at law, the remedy by interpleader was introduced into equity; but, as it left many cases of hardship unprovided for, bills quia timet obtained, which wire essentially in their nature writs of prevention, and therefore instituted before the wrong has been, or is actually being, suffered. But, as these did not afford relief, in many cases -where injury was being suffered for which the law afforded no adequate protection, as where courts of equity interposed to prevent waste or destruction or deterioration of property pendente lite, or to prevent irreparable mischief,—bills of peace and writs of injunction were resorted to. The grounds upon which the jurisdiction of courts of equity in proceedings of this character was founded, arose from their ability to give á more complete and perfect remedy than is obtainable at law, in order to prevent irreparable mischief, or to suppress oppressive and vexatious litigation. In fact, equity has always intervened where the law cannot afford adequate relief.

The question arises in the case at bar whether the plaintiff has brought itself within the jurisdiction of a court of equity by the facts developed upon the hearing of these motions. It is urged that the plaintiff has no standing in court, as against these parties seizing these goods under their replevin writs. But it was held in the case of Bank v. Bunn, 97 N. Y. 149, that an execution creditor, if he meets with an obstruction to his levy, may, because of his general lien, proceed in equity, making all the rival claimants parties, and prevent, if need be, the transfer of the property by the plaintiff in replevin, avoid a multiplicity of suits, and so determine in one action the whole controversy. In the case at bar, the plaintiff had an actual lien upon the property, having levied thereon, and being in possession of it. Its levy is obstructed by the various claimants of this property as represented in the replevin suits, and in some cases different claimants, claiming different portions of the same piece of property. If these defendants are allowed to go on, a large portion of this property upon which the plaintiff has obtained its lien •will be absolutely destroyed, and, if it should finally succeed in the replevin actions, it will have but a barren victory. Therefore it has brought this action in equity, making all the rival claimants parties, and claiming the right to prevent the transfer of the property by the plaintiffs in replevin, and also claiming to avoid a multiplicity of suits, precisely within the principle of the case cited. In this action the rights of all the parties can be protected, and the property or its proceeds preserved for the party who shall finally be decided to be entitled to the same. Without elaborating the propositions heretofore referred to, it seems, from the facts disclosed by these papers, that if there was ever a case in which a court of equity should intervene to prevent irreparable injury, it was under circumstances such as are disclosed in the case at, bar.

The point made that the parties in the replevin suits are by this means deprived of their rights to a trial by jury cannot have any force, because, if they are entitled as matter of right to a trial by jury, issues may be framed by which they may be able to have the benefit of that right. But we do not intend to intimate any opinion upon that subject, because it has become familiar law that even a replevin suit may become an action in equity by an order of interpleader. Upon the whole case, therefore, we are of opinion that it was a wise exercise of the discretion of the court to prevent the dissipation of this property, and to take possession of the same itself, until the determination of these rival claims, and the ascertainment of the rights and interests of each. It is claimed by some of the appellants that their actions were brought for the recovery of goods which remained in the original packages, or in the original piece, and which were not either manufactured or in process of manufacture at the time of the issuance of the writs. There may be a few instances of that kind, but there is no sufficient reason why one or two suits should be allowed to progress if all the others are to be enjoined. The orders appealed from should therefore be affirmed, with $10 costs and disbursements.

APPEAL FROM ORDER DIRECTING RECEIVER TO SELL GOODS.

Van Brunt, P. J.

In an opinion handed down herewith, the circumstances out of which this litigation arose, and the receiver was appointed, have been adverted to, and it is not necessary to repeat them here. It appears from the papers that the receiver, upon obtaining possession of the goods, found that they consisted of manufactured clothing, goods in the piece, and goods in process of manufacture; and that, in respect to the manufactured goods, portions of them only were claimed by the plaintiffs in replevin, and in other cases different plaintiffs claimed different portions of the same garments; that the season for the sale of summer clothing was nearly over, and that it was the best time of the year for the sale of winter clothing; that the cloth in piece would sell better within a short time than if held over the summer; that the goods were expensive to store, and exposed to injury from dust, moths, etc.; and it would involve heavy expenses to keep them. The receiver had also ascertained that the insolvent firm had a method of keeping an accurate record of all the goods which they bought, by which they could be traced, through the processes of manufacture, into made-up garments, and if they should be sold the identity of the proceeds would be preserved, and that some of the goods were cut out, but not made up, and that they would sell for more than the expense of making them up, if they should be completed, and that other goods were held by workmen under claim of lien for their labor. The receiver thereupon made an application to the court for instructions how he should proceed, and upon that motion various plaintiffs in the replevin suits appeared and opposed the motion. The court directed the receiver to sell the manufactured goods, and hold the proceeds subject to the further order of the court; to complete the clothing in process of manufacture; to sell it, and hold the proceeds subject to the order of the court; to store the piece goods; to settle in his discretion with workmen or others claiming liens; to keep by itself the proceeds of the sale of each lot of replevied goods; and to collect unpaid claims held by him as receiver due to the insolvent firm; and from this order this appeal is taken. One of the points urged by the court below in opposition to the motion, and now before this court, is that the court below erred in assuming that the appointment of the receiver was authorized, while the papers used upon the motion show that such appointment was unauthorized - by law and void. We have already reached the determination, in the opinion adverted to, that, under the circumstances brought to the attention of the court on the application for the appoin t.ment of a receiver, it was necessary that the court should appoint a receiver in order to protect the interests of all the parties. It was also urged that the receiver should not have been instructed to sell any part of the property in suit, for the reason that it appears that it could be duly ascertained who was absolutely entitled to each particular parcel of property held by him, and that course should been adopted by the court which would have compelled the receiver to ascertain that fact, and that an order should then have been made restoring to each party such parcel of goods as belonged to him or them. We are not aware of any circumstances under which such a duty is imposed upon an officer of the court. If the plaintiffs in replevin who are defendants in this action are entitled to any relief, it becomes necessary for them to show to what goods they are entitled, and then, if they are entitled to the goods, they will receive the proceeds of the sales thereof. The court was bound to keep possession of the property in order to protect the interests and rights of all parties, and, as it is apparent that a sale was for the benefit of all, if the court was to retain possession of the property there was no error in ordering such sale. It is also urged that the order appealed from, in so far as it directs the unmanufactured merchandise to be stored and held subject to the order of the court, should be reversed, because it perpetuates an apparent injustice, which was initiated by the order appointing the receiver. This point has already been covered by the opinion in the other case, and proceeds upon the theory that certain plaintiffs in replevin are absolutely entitled to the possession of certain portions of this property because they are the only claimants. Until final judgment, property taken in replevin is supposed to be in the custody of the court. If the property has been delivered to the plaintiff in the action of replevin, the judgment of the court in that action is that it be returned, or, in default thereof, giving a money judgment. All that the court has done in the appointment of a receiver is to appoint a custodian for this property pendente lite, and thus, by the interposition of its equitable powers, to prevent the injury which would result by refusing to exercise that power. The order should be affirmed, with $10 costs and disbursements.  