Opinion
Argued June 4, 1924
Decided July 5, 1924
Carl Sherman, Attorney-General ( Michael J. Montesano, Clarence C. Fowler, Clarence W. Roberts and William H. Galentine of counsel), for appellants.
Evan Hollister for respondent.
The substantial question is whether the Supreme Court, having, in liquidation proceedings under section 63 of the Insurance Law (Cons. Laws, ch. 28), enjoined all persons from bringing suits against the insurance company and from interfering with the Superintendent of Insurance in such proceedings, has jurisdiction to grant leave to an applicant to commence an action against the Superintendent of Insurance in the courts of the United States to impress certain funds with a trust in favor of the applicant. The court which granted the injunction might in its discretion lift it. It has done so. Its order, if we put aside mere technical objections, is an order against which no error of law can be urged.
The contention of the Superintendent of Insurance is, in the main, that he, as an officer and agency of the State of New York, cannot be sued without the consent of the State; that the courts have no jurisdiction to entertain actions to interfere with State funds in custodia legis; that applicant's sole remedy is in the liquidation proceedings, and that, therefore, the order granting leave to sue was erroneous as matter of law.
Such contentions may or may not be sound. The conclusion sought therefrom does not follow. They go to the merits of the action when brought. If it were not for the order in the liquidation proceedings, applicant would have had the right to commence his action against the Superintendent, although the Superintendent might have a complete defense thereto. The Special Term has, in its discretion, removed the bar of the injunction. The applicant has begun his action in the United States court. Nothing has been adjudicated but the fact that he is not thereby to be chargeable with contempt. The discussion of the law in the opinions below reveals the judicial mind in operation but leads to no other decision than that the applicant may try his case, unimpeded by the bar of the restraining order. A reversal of the order would have no binding force so far as the jurisdiction of the United States court, which has already attached, is concerned. It might serve as a gesture of comity and it might put the applicant in contempt. But no reasons in law are presented which require such reversal.
The order should, therefore, be affirmed, with costs, and the questions of law certified answered in the negative.
HISCOCK, Ch. J., CARDOZO, POUND, McLAUGHLIN, CRANE, ANDREWS and LEHMAN, JJ., concur.
Order affirmed.