In re the Voluntary Dissolution of Tarrytown, White Plains & Mamaroneck Railway Co.

117 N.Y.S. 695 | N.Y. App. Div. | 1909

Burr, J.:

On March 1, 1908, the Tarrytown, White Plains and Mamaroneck Bail way Company executed a mortgage to the Knickerbocker Trust Company, as trustee, to secure its bonded indebtedness, amounting to $300,000, and covering all the property, franchises and assets of the said company. On January-13, 1909, in an action then pending in the Supreme Court, sitting in Westchester county for the foreclosure of said mortgage, a receiver was appointed of all the mortgaged premises and property mentioned in the complaint in said action, and the rents, issues and profits thereof, who duly qualified. On the fifteenth day of January, in the same court, an order was entered in a proceeding entitled In the Matter of the Voluntary Dissolution of the Tarrytown, White Plains and Mamaroneck Bailway Company, a Domestic Corporation. That- order contained, among others, the following provisions:

“ And it is further ordered that the creditors of said corporation and all other persons be and they are hereby restrainéd and enjoined from bringing any action or proceedings against the said corporation, and they are hereby restrained and enjoined from taking any further proceeding's in-any action or proceeding heretofore commenced by them or any of them against the said corporation or any of the officers or stockholders thereof, except upon'and until the further order of this Court. * * *

“ And it is further ordered, adjudged and decreed that the said temporary receiver pay out of the income and earnings or other funds of the said corporation now in liis hands, or if the same be insufficient, then same or any deficiency thereof shall be payable out of the first funds in the hands of said permanent receiver, the sum of two thousand dollars, which is hereby awarded to Messrs. Bowers & Sands, the attorneys and counsel of the petitioners herein, as an allowance in addition to their taxable costs in this proceeding, and also the sum of one hundred and ninety-one and 92/100 dollars taxed for said petitioners as their costs and disbursements in this proceeding, to be adjusted by the clerk of the county of Westchester.”

The Knickerbocker Trust Company appeared specially upon the hearing of the motion to oppose the granting of the order, and now appeals from the same. By stipulation entered in the record the .only questions raised xxpon the hearing of said appeal relate to the provisions of the order above referred to.. The court has no power to make an order restraining the prosecution of the action in foreclosure by the said trustee. The injunctive power of the court before final order in dissolution proceedings is limited to restraining actions for the recovery of a sum of money only. (Code Civ. Proc. § 2423.) There is no greater power conferred upon the court in connection with the granting of a final order. The power which the court possesses in such, proceedings is purely statutory, and does not depend upon its general equity powers. The lien of the mortgagee must be preserved, with the right to enforce the same, unless courts and Legislatures are to override the vested rights of creditors. (Matter of Binghamton G. E. Co., 143 N. Y. 261; Davidson v. John Good Cordage Co., 63 App. Div. 366; Matter of Hamilton Park Co., 1 id. 375.) The court was without power to make an extra allowance to the petitioners in the proceedings for the voluntary dissolution of the company. Such a proceeding, taken under title 11 of chapter 17 of the Code of Civil Procedure, is a special proceeding. (Code Civ. Proc. §§ 3333, 3334.) There is no power to make an extra allowance in a special proceeding, except that in certain districts of the State such an allowance may be made in special proceedings by way of certiorari to review assessments. (Code Civ. Proc. § 3253; Rensselaer & Saratoga R. R. Co. v. Davis, 55 N. Y. 145; Matter of Holden, 126 id. 589; Matter of City of Brooklyn, 148 id. 107; Matter of Grade Crossing Commissioners, 20 App. Div. 273.)

The order appealed from must be modified by striking therefrom so much of the provisions thereof as restrain and enjoin the Knickerbocker Trust Company, as trustee, from proceeding with the action to foreclose its mortgage, and by striking therefrom the provisions making an extra allowance in addition to the taxable costs to the attorneys and counsel of the petitioner in said proceedings, and as modified the said order is afiirmed, without costs.

Woodward, Jenks, GIaynor and Miller, JJ., concurred.

Order modified in accordance with opinion, and as so modified affirmed, without costs. Settle order before Mr. Justice Burr.