Redondo Steamship Co. v. Irving Bank-Columbia Trust Co. , 219 A.D. 825 ( 1927 )

Per Curiam.

We axe of opinion that the judgment, in so far as it finds that the judgment creditors Kerr Steamship Company, Inc., Indemnity In urance Company of North America, and Benjamin Harris, as receiver of the property of Frank Auditore, had or have no rights in the fund in issue here, must be reversed. The finding “ that the plaintiff is entitled to the balance of the said fund ” should be reversed, because the defendants mentioned were erroneously prevented from giving evidence of their counterclaim setting up ownership of the fund. The findings of fact and conclusions of law which are inconsistent with this conclusion should be set aside. We are also of opinion that it was error for the court to hold that the Paraseandola judgment was binding upon the receiver, Harris, on the theory that he had no greater rights than his judgment debtor, for the reason that said receiver represented the creditor and was appointed for that purpose. It was also error for the court to find that the third party order had lapsed and become null and void. It was error for the court to find that the receiver had not acquired any legal title to said fund through his appointment as receiver, since such legal title related back to September 8, 1923, the date of the service of the third party order on the Irving Bank-Columbia Trust Company, at which time the creditors obtained an equitable lien on the fund, which title was not superseded by the appointment of the trustee in bankruptcy. The defense that the trustee in bankruptcy obtained title could not be asserted collaterally by any person other than the trustee, and he is not a party to the action. The judgment in so far as appealed from should be reversed upon the law and the facts, and new trial granted, costs to appellants to abide the event. Kelly, P. J., Manning, Young, Kapper and Lazansky, JJ., concur. Judgment reversed upon the law and the facts, and new trial granted, costs to appellants to abide the event.