123 N.Y.S. 71 | N.Y. App. Div. | 1910
The defendant, organized under the laws of the State of Pennsylvania, and under contract to construct some ten miles of the Catskill aqueduct, was financially unable to continue the work. Thereupon the Georgia-Florida Lumber Company, a domestic .corporation, undertook to advance to the defendant $200,000 upon the delivery to persons named by the Georgia company of all the stock of the defendant and the transfer of the control of the defendant to the Georgia company. The latter company prosecuted the work until it had advanced some $287,000, when dissensions arose concerning the fidelity of McNally, who remained president and active manager in the conduct of the work. On December 15,1908, McNally went to Pittsburg and procured the Burton Powder Company to file a bill for the appointment of a receiver of defendant, and caused defendant to appear through a clerk of complainant’s attorney and file an answer joining in the prayer for a receiver. Thereupon one Erny, of Pittsburg, was appointed receiver, with power to take possession of and manage and operate defendant’s properties and to conduct its business. Later the decree was vacated upon the grounds that the Burton Powder Company was a simple contract creditor, that McNally had no power to represent the company, and that the suit was collusive. But prior thereto and on December eighteenth, two days after the decree was entered in Pennsylvania at the instigation of McNally, the plaintiff herein as assignee of a part of the claim of the Burton Powder Company began an action for the appointment of an ancillary receiver of the assets and property of the defendant within the State of New York, with power to conduct the business and to continue the work, for enjoining suits against the defendant, and for winding up its business, the sale of its property, and the distribution of the proceeds. A summons and complaint and notice of motion for the appointment of an ancillary receiver were served upon McNally, who secured as attorney for the
It is beyond doubt that Johnson, the designated attorney for the defendant, agreed fully and explicitly to the provision in both orders for reimbursing the ancillary receivers and for the payment of their commissions ; that this agreement was announced to the court, and that all parties acted accordingly. - The defendant repudiates the action of this attorney, whom it authorized by resolution to act for it, and through other attorneys asserts that the court had
In the case at bar there is no distinction between the appointment of receivers of a corporation and the property of the corporation. The bill was filed for the very purpose of winding up the corporation and distributing its assets in this State, so that Popper v. Supreme Council (61 App. Div. 405) has no application. The plaintiff had no special interest in or lien upon the property. He was not a judgment creditor, nevertheless he filed a bill in equity as if he had such lien or the right of such a creditor. The court acquired jurisdiction of the defendant by service of the summons
In the case at bar the court did have jurisdiction of the property. The property was in the State. It did have jurisdiction of the defendant because the defendant was doing business within the State, and its president and officers were within the State, conducting such business. The summons was served upon one of such officers, and thereby the defendant was brought before the court pursuant to such summons. It is true that although the defendant Was before the court the court could not have granted plaintiff the relief sought unless aided thereto by defendant’s act. However, the defendant urges that the suit was collusive. It was collusive in. the sense that the company, acting through its president, instigated it for the protection of defendant, and consented to the relief. The act is not fraudulent, nor is it an imposition upon the court. It was not the wish, act or judgment of those who by private contract were controlling the company, but. it was the act of the president whom such persons held out to the world as its chief officer, and hence the act of the defendant. This is not saying that the defendant was irrevocably bound, 'but the court was asked to act presumptively by the defendant. Later the time came when the corporation, fully apprised. of the sitúa
The order of March tenth should be affirmed; the order of July twenty-ninth should be modified by fixing the receivers’ commissions at the sum of $485.82, and as so modified should be affirmed, without costs.
Jenks, Bure, High and Carr, JJ., concurred.
Order of March tenth affirmed, without costs. Order of July twenty-ninth modified by fixing the receivers’ commissions at the sum of $485.82, and as so modified affirmed, without costs.