The Sun

Decide That Proceeds to "Receiver for Alley"

The Appellate Division of the Supreme Court yesterday reversed the lower court in an action brought by the receiver of the property of a member of the New York Stock Exchange to decide whether the proceeds of the sale of the seat should go to him or to the trustee in bankruptcy for the member's firm. The Appellate Court decides in favor of the receiver.

The action was brought by John A. Wrede, receiver of the property of William S. Alley, against William L. Clark, as trustee in bankruptcy. William Cothout, a judgment creditor for $23,000 on a note, had Alley examined in supplementary proceedings, which disclosed his ownership of the Stock Exchange seat.

Wrede was appointed receiver of Alley's property, and on May 3 following Alley filed a petition in involuntary bankruptcy, as the result of which Clark became the trustee.

Alley committed suicide on August 5, 1907, and three days later his seat was sold for $73,000. After his obligations to Stock Exchange members were settled only $9,000 remained. The Stock Exchange authorities were willing to pay the money either to the trustee or the receiver, and the suit was brought, which is now decided in favor of the receiver.

The opinion by Justice Houghton states that the judgment creditor is entitled to the money because he got the order in supplementary proceedings more than four months before Alley filed his petition in bankruptcy, and that the judgment accordingly created a lien on the Stock Exchange seat, although the receiver was appointed less than four months before the bankruptcy petition was filed. Since the $9,000 balance from the sale of the seat was insufficient to pay the judgment, the Court decides that the trustee is entitled to no part of it.

The receiver put in his claim for the money in the Bankruptcy Court, but the Federal Judge disallowed it.

Alley was the founder of the Larchmont Yacht Club and shot himself in his rooms at the club.