Attorney General v. Life & Fire Insurance, 4 Paige Ch. 224

Attorney General v. Life & Fire Insurance

4 Paige Ch. 224 | New York Court of Chancery | 1833

The Chancellor.

The forty-second section of the title of the revised statutes, under which these receivers have been appointed, gives to them all the powers and authority conferred, and subjects them to the same obligations and duties which are imposed upon receivers who are appointed upon the voluntary dissolution of a corporation upon the petition of its directors or trustees. (2 R. S. 464, § 42.) And to ascertain the powers, obligations and duties of receivers upon a voluntary dissolution of a corporation, we are, by the 68th, 70th, 72d, 73d and 74th sections of the same title, (2 R. S. 469, 470,) referred to the powers, authority, duties and obligations by law possessed by, or imposed upon, trustees or assignees of insolvent debtors, &c. The receivers in this case have therefore the right to settle all claims against the corporation; and *226to enable them so to do, they are authorized to examine any Person on oath *n relation to such claims. (2 R. S. 42, § 7, sub. 8.) It is their duty, acting, under the oath of office which, by these several provisions, every such assignee, trustee or receiver is required to take, (2 R. S. 41, § 5,) to allow all claims against the corporation, in behalf of persons claiming to be debtors thereof, which they shall be satisfied are justly due. But they should not allow any claim which the .claimant could not have recovered against the corporation, either at law or in equity, if he had sued for the recovery of the same. In this respect, the receivers act as guardians; of the rights of all parties interested in the fund ; and they have no right to allow a claim, which is riot a proper charge upon that fund, without the consent of all who are interested in having such claim rejected. If the receivers disallow the claim, and referees are appointed, although the receivers may permit those for whose benefit the defence against the claim is made to manage that defence, this must be done under the direction of the receivers; and there cannot be a compromise without their consent. In this case, referees were appointed to decide the question between the claimants and the receivers, whether those bond-claims were due from the corporation, so as to form legal or equitable debts. If they are not legally or equitably due, the stockholders who have not consented to the compromise have a right to object to the same; though it may probably be binding upon the parties thereto, so far as it can be carried into effect without interfering with the rights of others. As the receivers do not state, in their petition, that any evidence has been elicited, on the hearing before the referees, to satisfy them that these claims could have been recovered against the corporation if it had not become insolvent, their duty to the stockholders who have not consented that their funds should be used to. pay these bonds, requires of the receivers that .they should continue the defence against the claims of these bond-holders, before the referees, so long as that defence can in their opinion be rendered effectual.

The receivers must therefore be directed to.proceed .to"a final decision, before the referees, upon the validity of these claims; leaving the question for future decision, as to the ef*227feet of the compromise upon the rights of the parties thereto, if it shall turn out that the bonds were not legally due from the corporation,