| New York Court of Chancery | Oct 17, 1843
The sixth section of the act abolishing the office of bank commissioner, (Laws of 1843, p. 301,) authorizes the comptroller, in certain cases, to appoint an officer as a substitute for those whose office is abolished. But his powers and duties do not appear to apply to a case like the present, where a bank has already been proceeded against j even if he would be authorized to institute a proceeding, in this court, for an injunction against the bank which he was appointed to examine. The power of such special commissioner to apply, in his own name, for an injunction, or for the appointment of a receiver against the particular bank to which his appointment relates, is at least doubtful. For the legislature, in the adoption of the sixth section of the act, appear only to have had in contemplation an examination into the condition of the bank. And if they had intended to give him the power which the former bank commissioners, or a majority of them, jointly possessed, in instituting
But although the statute has made no provision for the revival or continuance of a suit of this kind, commenced by the bank commissioners, if such revival is absolutely necessary for the purposes of justice, this court has unquestionably the power, upon a proper bill filed, by a party interested in such revival, or by the attorney general where the interest of the people requires it, to allow the proceedings already instituted to be continued. In cases of this kind, after the making of a final order for the appointment of a receiver, such receiver becomes absolutely entitled to all the property and effects of the corporation, for the purpose of distributing the same among the creditors and stockholders. (2 R. S. 464, § 42; 469, § 67.) Such final order, therefore, is in the nature of a decree in an ordinary creditor’s suit, against executors, or others, who are trustees of a fund upon which several distinct creditors have claims for the payment of their debts rateably, or according to a specified order of priorities. In cases of that kind, creditors who are not nominal parties-to the suit may make themselves such parties in fact by coming in and presenting their claims to the master, under the decree; and by submitting themselves to the jurisdiction of the court, for the settlement and adjustment of their respective claims upon the fund, as directed by the decree or order under which such claims are presented. A creditor who comes in and makes his claim under such decree is quasi a party to the suit, and is entitled to the benefit of the decree' as such party. And he may be restrained from proceeding at law for the recovery of his debt, after he has made his election to proceed in this court for the recovery of his debt under the decree. (Farnham v. Burroughs, 1 Dick. Rep. 63.) It is now settled that, after such a decree, a creditor who is entitled to come in under it, although he has not so come in, and is not in fact a party, may be restrained from proceeding at law; and may be compelled to come in under the decree or lose his claim upon the fund.
Under such a decree for the benefit of creditors generally, therefore, all the creditors who may wish to come in under the same and avail themselves of its provisions, are for every substantial purpose considered as parties. And if the nominal complainant neglects to proceed with due diligence under the decree, a creditor who is entitled to come in and prove his debt before the master, will have leave to prosecute the suit. (Powell v. Walworth, 2 Mad. Rep. 183. Cook v. Bolton, 5 Russ. Rep. 282.) And where the sole complainant in such a suit dies, or the suit becomes abated by the death of a defendant therein, if the complainant, or his representative, does not revive within such reasonable time as may be fixed by the court for that purpose, it is a matter of course to permit any creditor, who has established his debt before the master, to file a supplemental bill in the nature of a bill of revivor, to revive and continue the proceedings. (Dixon v. Wyatt, 4 Mad. Rep. 392. Houlditch v. The Marquis of Donegall, 1 Sim. & Stu. Rep. 491. Mitf. Pl. 79, 4th Lond. ed. 3 Dan. Ch. Prac. 173.) Although the cases referred to by Lord Redesdale were those in which the creditor had already come in and established his claim before the master, I apprehend that any creditor who had an existing claim against the fund, and who has a right to come in and prove the same under the decree, has an equal right to file a supplemental bill to revive, and to have the benefit of the former proceedings. The only difference between his case, and that of a creditor who has established his claim, appears to be, that the former would be bound not only to state the existence of his
If a revival of the suit in this case was necessary, therefore, I should, under the circumstances, permit any of the creditors of the bank who had presented and proved their claims to the satisfaction of the master, under the order for that purpose made by the court, to file a supplemental bill to revive and continue the proceedings. And similar permission would be given to any creditor who had presented his claim to the receiver within the time limited by the order for that purpose, upon the presentment of a petition, on oath, showing that his claim which had been rejected by the receiver was a valid claim against the bank at the time of its failure.
A revival of the proceedings does not, however, appear to be necessary where there is no further litigation to be had with the defendant in the original suit, and where the only questions to be settled are between the different creditors claiming payment out of a fund which is in possession of an officer of the court, and is under its control. (3 Dan. Ch. Pr. 224.) In the case under consideration the nominal complainants are no longer in existence, and their right to continue these proceedings has not; devolved upon any other persons or officers representing the same rights. Indeed the whole object of the suit has already been attained, by placing the funds of the bank in the hands of the receiver, to be distributed among the creditors and stockholders of the corporation, under the direction of the court. And the charter of the bank has in fact been annihilated by the decree; so that the citizens of the state are in no danger of being injured hereafter by any proceedings of its officers. All that is necessary, therefore, is to direct an order to be entered that the master proceed upon the reference, to ascertain and determine the validity of the claims which have been presented to the receiver and disallowed.
As there are in fact no bank commissioners, and the corpo