Corn Exchange Bk. of Chicago v. . Blye

101 N.Y. 303 | NY | 1886

The sole question in this case is whether section 5242 of the United States Revised Statutes prohibits the requisition issued to the sheriff and protects the receiver in his possession. The Bank of Middletown became insolvent and the defendant was appointed its receiver under the Federal law. That appointment vested in him all the assets of the bank to be converted into money and distributed among the creditors. The object sought to be accomplished is the distribution of those assets fairly and without preferences, and that has been held to be the aim and purpose of the section in question. (Robinson v. Bank ofNewberne, 81 N.Y. 385; Rosenblatt v. Johnston,104 U.S. 462.) It specifically prohibits all transfers of the corporate property made with a view to preferences, and so protects the creditors from any voluntary act of the bank which selects out favored individuals for payment. But the bank may be passive, and such individuals gain a preference by a suit against the corporation preceded or accompanied by an attachment or injunction, or, after judgment, enforced by an execution. These three things, therefore, were specifically prohibited by name; each being process well known and accurately defined in the law; and without any general words to carry the prohibition beyond them. The receiver, by his appointment, acquires no right to property in the custody of the bank which the latter does not own, as against the real owner; and the section in question was plainly not intended to protect the receiver's custody as against such owner. It aims to protect the property of the bank in his hands, and not to give him arbitrary control of what the bank does not own. If the latter should be held, its injustice is well suggested by the General Term in its application to special deposits of customers left merely for safe-keeping. It does not alter the case that there is here a dispute about the title, and the receiver claims to be owner. He might make such claim in any case. No law makes him the inevitable stakeholder pending the litigation. He may become so by giving the needed security. and we can see no just reason why he should be exempted from that obligation which falls upon others. The plaintiff is required to give such security as the condition of his writ, and the receiver need run no risk in the performance of his duty. It is said the word "attachment" is used not in the local sense affixed by State enactments, but in a broader sense; and the definition of Bouvier is cited. But by that definition and in every use of the term it always assumes title in the person against whom the writ issues, and seeks to hold possession of his property, and on the ground and for the reason that it is his. No nomenclature has ever made it the equivalent of a writ of replevin which issues upon a theory exactly the reverse. There is no collision of jurisdictions. The authority of the Federal courts over the assets and the right of its officer to hold them is not questioned or invaded. No property over which those courts have obtained jurisdiction is interfered with. What is sought to be recovered is property over which they have obtained no jurisdiction, and as to which they have conferred no right upon him.

The order should be affirmed, with costs.

All concur.

Order affirmed.