Summary
In Popper v. Supreme Council (61 App. Div. 405) the defendant, an Indiana corporation, which was a mutual benefit or fraternal association, became insolvent and was in the hands of a receiver appointed in Indiana.
Summary of this case from Mitchell v. Banco de Londres y MexicoOpinion
May Term, 1901.
Howard H. Morse [ Thomas Cooper Byrnes with him on the brief], for the appellant.
William L. Mathot, for the respondent.
The complaint alleges these facts: The plaintiff, a resident of this State, is the beneficiary named in a certificate of membership which was issued by the defendant, in 1885, to Henrietta Popper, the wife of the plaintiff. She continued a member of the defendant until her death in 1900. Due notice of her death was given to the defendant, but the claim has not been paid.
The defendant is an Indiana corporation having subordinate lodges and carrying on business in this State. It became insolvent and a receiver was appointed by a court of Indiana. The receiver claims the right to the possession of the assets of the corporation in this State.
Other parties having claims against the order have commenced actions and obtained attachments against the assets in this State. These assets consist of moneys on deposit in banks and moneys due from subordinate councils, and are in danger of being dissipated by litigation and of being unequally applied to payments of the claims of creditors.
The plaintiff, on behalf of himself and others similarly situated, asked that the funds of the defendant in this State may be brought into court and a receiver appointed so that the funds may be equitably distributed among the claimants entitled thereto.
The defendant appeared and demurred on the ground that the court has no jurisdiction of the person of the defendant or the subject of the action and that the complaint does not state facts sufficient to constitute a cause of action. The demurrer being overruled, the defendant appeals.
In Glines v. Supreme Sitting Order of Iron Hall (20 N Y Supp. 275; S.C., 21 id. 543); Mosher v. Supreme Sitting of Iron Hall (88 Hun, 394), and in Glines v. Binghamton Trust Co. (68 id. 511), the right of the plaintiff to maintain an action of this character is recognized. In People v. Granite State Provident Assn. ( 41 App. Div. 257; affd., 161 N.Y. 492), this court, speaking through Mr. Justice CULLEN, recognized the jurisdiction of the court over the general assets of a foreign corporation within this State and the power of the court to distribute them. It is true that the action was brought by the Attorney-General, under section 1810, subdivision 3, of the Code of Civil Procedure, but this does not affect the question under consideration. We are not now concerned with the question of the distribution or disposition of the funds in the manner adopted in that case, but simply with the question of jurisdiction and whether the complaint states facts sufficient to constitute a cause of action.
There is a manifest distinction between a receiver of property of a corporation and a receiver of the corporation. In this action the plaintiff asks for the former only, in order to prevent waste of assets. The power to appoint a receiver of the property of a corporation is inherent in the Supreme Court, and was recognized in Hegewisch v. Silver ( 140 N.Y. 414, 420).
Sections 1810 and 1812 of the Code of Civil Procedure do not interfere with this power, and if they did, it might well be that they would be unconstitutional as infringing the ancient jurisdiction of the court. (Const. art. 6, § 1.) See, also, Beach on Receivers (2d ed.), section 3, where the author speaks of the distinction suggested and refers to instances where ancillary receivers are appointed in a jurisdiction other than that wherein the original receiver was appointed.
It seems quite clear that the complaint states a condition of facts which may require the equitable intervention of the court to secure equality of payment of claims due creditors of the defendant corporation residing in this State, by preventing priority through attachments and judgments.
The interlocutory judgment should be affirmed.
All concurred.
Interlocutory judgment affirmed, with costs.