161 Mass. 224 | Mass. | 1894
On October 26, 1892, James F. Failey, the receiver of the defendant corporation, appointed by the Superior Court of Marion County in the State of Indiana, presented his petition to the Superior Court of this Commonwealth to be admitted as a party respondent in the present suit, and he prayed that some person might be appointed as receiver ancillary to the proceedings in Indiana, with the usual authority to take possession of all the property of the corporation in this Commonwealth, to collect all debts due to said corporation here, and that, after deducting the proper charges and expenses, to be determined by the Superior Court here, said ancillary receiver should be ordered to “ pay over to said Failey, receiver, for distribution to the membership of the said Order, including the citizens of this State, said funds, provided that, before such remittance be made, this court [the Superior Court here] reserves the right to require assurance from the Marion Superior Court aforesaid that, upon the receipt of said funds, and in making the distribution, all citizens of this State, members of said Order or creditors thereof, shall be entitled to receive as much ratably in propor
The report of the justice of the Superior Court, before whom the hearing was had, then proceeds as follows: “ It was then stipulated by the parties, in open court, that if the decree dismissing the petition was erroneous upon the ground that the petitioners had a right to be heard upon their petition, although defendants in the case, the said decree should be annulled, and the petition should be sent back for a hearing thereon, provided that the allegations of the petition were sufficient to authorize a decree, in the discretion of the court, for the petitioners. It was further stipulated that the twelfth edition of the constitution and by-laws of the defendant corporation should be considered a part of the record, and that any part thereof may be referred to at the argument, but without prejudice to the right of any party to question the accuracy of such constitution and by-laws in any future proceeding. Also that the reports of the receiver on file in this case may be referred to, and arguments may be based upon facts therein stated.” Thereupon the justice, being of opinion that his decree
The bill in the present suit was filed on August 24, 1892, in the Superior Court for the County of Worcester, by C. E. Buswell, against the Supreme Sitting of the Order of the Iron Hall, described as “a foreign corporation organized under the laws of the State of Indiana, and having its legal location in the city of Indianapolis and State of Indiana, and doing business in this Commonwealth,” and against the “ Local Branch No. 396 of the Order of the Iron Hall located at Worcester, in the county of Worcester and Commonwealth of Massachusetts, a voluntary association holding a charter from and working under the jurisdiction of the Supreme Sitting of the Order of the Iron Hall,” etc., and against certain savings banks with which said local branch had deposited the twenty per cent of the amount received from the assessments collected from its members, “ which amount constitutes a reserve fund, and is claimed to be the property of, and under the control of, said Supreme Sitting.” The plaintiff Buswell was a member of said local branch, and the holder of a benefit certificate for $1,000. He prayed for a receiver of said local branch, for an injunction, and for a pro rata distribution of said reserve fund among the certificate holders of said local branch. This bill was afterwards amended by the plaintiff so that it should stand as brought “ in behalf of himself and any and all other certificate holders of the Order of the Iron Hall hereinafter mentioned, who may hereafter be joined as parties herein,” and the prayer of the bill was amended so that it should read as follows: “ that a receiver may be appointed to take charge of all the business, property, goods, effects, and assets of said defendant, the Supreme Sitting of the Order of the Iron Hall within this Commonwealth, and distribute the same among certificate holders of the local and sisterhood branches, organized in, and creditors residing in, this Commonwealth, according to law and the order of the court ”; and an order was obtained that all such local and sisterhood branches pay over and deliver to the receiver appointed by the court all property of the principal defendant, and all moneys and property deposited by the officers of the local branches in
Although the facts averred in the petition of Mr. Failey and the petition of Stearns have not been found to be true, yet for the purpose of determining the questions of law before this court the averment of facts in these petitions must be taken to be true. The principal facts are that Mr. Failey was appointed receiver on August 23, 1892, by the court in Indiana, under the laws of which State the corporation was organized. It is not contended that the court in Indiana did not have jurisdiction over the defendant, or that the appointment of a receiver was not within the power of that court. The receiver appointed by that court was empowered to sue, in his own name as receiver, all persons within or without the State of Indiana, and to receive
Without considering the right of a receiver appointed by a court of equity in a foreign jurisdiction under general equity powers to sue or intervene in his own name in this Commonwealth, we think it clear that Mr. Failey, on the allegations of his petition, must be taken to be, in effect, an assignee of a foreign insolvent corporation, acting under a court of competent jurisdiction of the State by which the corporation was created, and in which its principal offices were situated and its principal business was carried on. We think such an- assignee has a standing to intervene in and be heard on a proceeding in this Commonwealth for the appointment of a receiver of the property of the corporation found here. We assume that the proceedings in this Commonwealth, whether they be regarded as ancillary to the proceedings in Indiana or as independent proceedings, are within the jurisdiction of the Superior Court here, and we infer that, as no creditor of the defendant has appealed from the decrees entered by that court, the creditors are satisfied therewith. See St. 1892, c. 435. The receiver reports that he holds only $697.85 money belonging to the general fund, with a small amount of other property, against which there are outstanding claims far exceeding the amount of the money and property belonging to this fund in his hands. The amount of the claims of creditors upon this fund is not stated in the papers before us.
An examination of the various provisions of the constitution and laws of the Order convinces us that the legal title to this reserve fund is in the Supreme Sitting of the Order, and not in the different local branches; that the twenty per cent of the assessment retained by each local branch differs from the eighty per cent transmitted to the Supreme Sitting mainly in this, that the possession and supervision, subject to the constitution and laws, remain with the local branches. The whole fund is for the protection of and payment of benefits to holders of benefit certificates, and the reserve fund seems to us essentially a part of the benefit fund, although it may be in the nature of a safety fund to insure the payment of maturing certificates. See Burdon v. Massachusetts Safety Fund Association, 147 Mass. 360. We infer that the Superior Court here has not regarded the reserve fund held by each branch as the special property of that branch. It has ordered all the reserve funds received from all the branches in this Commonwealth to be distributed as one fund among the certificate holders of all said branches. It appears, indeed, from the receiver’s second report, that there are some branches in this Commonwealth which have transferred the reserve fund in their possession to Mr. Failey as receiver, and we infer that the decree of the Superior Court here does not admit certificate holders of these branches as claimants to the fund in the possession of the receiver here.
It appears by the petition of Mr. Failey, that the court in Indiana has authorized him to collect all the moneys belonging to the Order in the possession of all the branches wherever organized, for the purpose of equally and ratably distributing them among the creditors and certificate holders of the corporation,
It is impracticable to lay down a general rule which must govern all receivers appointed here of the property of foreign corporations found in this Commonwealth. If any person has obtained by attachment or otherwise any valid lien on the property of the corporation in this Commonwealth, such lien is not dissolved by the filing of the bill and the appointment of a receiver, but must be enforced. Hubbard v. Hamilton Bank, 7 Met. 340. Taylor v. Columbian Ins. Co. 14 Allen, 353. Folger v. Columbian Ins. Co. 99 Mass. 267. When there is no such lien, the general principle is that the property should be so administered that all
In the present case, the holders of benefit certificates do not seem to us to be common creditors of the defendant corporation, and the bill in the present case was not brought by a single creditor to collect a debt. It was brought by a holder of a certificate for the common benefit of himself and other holders of certificates, who, in a sense, are the beneficiaries of the benefit and reserve funds. The holders of certificates have been contributors to these funds, which were intended to be used for the payment of benefits to all such holders. It has become
There is no statute which compels the court to proceed in any particular manner in the case at bar. It has been said in argument by the counsel for Mr. Failey, that by granting his petition the certificate holders resident in Massachusetts will probably receive more than under the decree made by the Superior Court. If this were certain, then, if that decree Were carried into effect, it might be equitable that the certificate holders who have shared in the benefits of that decree should also be permitted to prove their claims before the court in Indiana, in order to obtain another dividend, so that they might
If the court in Indiana is willing substantially to distribute the whole benefit and reserve fund equitably and ratably among all the benefit certificate holders who are members of the Order, as it wishes to do if the allegations of the petitions are true, we think that, on the facts stated in the petitions, it should receive the aid of the courts here in doing this. The receiver here should be allowed his charges and expenses, and all expenses of the suit here should be paid, and he should be protected against all suits and claims; but the balance of the reserve and benefit funds should, if the allegations of the petitions be found to be true, be transmitted to the receiver in Indiana, provided it appears by the decree of that court that it will admit the proof of claims against the reserve and benefit funds as made in and allowed by the court here when regularly certified by the court here, subject to such revision by the court in Indiana as justice may seem to that court to require, and will distribute the whole fund in its control so that the benefit certificate members of the branches in Massachusetts shall receive the same proportionate dividend as the benefit certificate members of branches in Indiana and in other States who are admitted to share in the fund. If the time is not extended so as to admit such an allowance of the proof of these claims in the Indiana court on an equality with others, when the money is in fact ready to be transmitted, then the petitions should be dismissed. See National Trust Co. v. Miller, 6 Stew. 155, 158; Parsons v. Charter Oak Ins. Co. 31 Fed. Rep.. 305; Fry v. Charter Oak Ins. Co. 31 Fed. Rep. 197; Jennings v. Philadelphia & Reading Railroad, 23 Fed. Rep. 569. The petitioners, including Mr. Failey, have a right to be heard on their petitions, and are not strictly to
So ordered.