31 N.Y.S. 155 | N.Y. Sup. Ct. | 1894
Lead Opinion
On November 5, 1883, the American Steam-Boiler Insurance Company deposited, pursuant to section 6, c. 463, of the Laws of 1853, $100,000 in bonds with the superintendent of insurance. The company subsequently having ceased to do business, an action was commenced by the people for the purpose of dissolving the corporation for nonuser, winding it up, and distributing its assets. In such proceeding the receiver was appointed, and duly qualified. The interest on the bonds so deposited became due on the 1st of May, 1894, and was collected by the superintendent of insurance; and to obtain such interest the receiver applied to this court for an order directing the superintendent to pay it over to him, which motion was denied upon the ground that there was no power in the court to grant the application.
Although it was stated upon the argument that there was no question as to the company’s solvency, the fact being that it was not only able to pay all its debts, but would, in addition, pay a large dividend to the stockholders, this does not appear in the petition, and cannot, therefore, be considered. As the law stood prior to 189:2, there was no authority in this court to interfere with a fund such as this, deposited under chapter 463 of the Laws of 1853 as amended; it having been directly held in the case of Ruggles v. Chapman, 59 N. Y. 163, that the courts have no power to compel the superintendent to transfer the trust imposed upon him by said act. The judge writing the opinion in that case, in speaking of the difficulties in the way of harmonizing the two independent schemes of dealing with an insolvent insurance company, with part of its assets in the hands of the superintendent of insurance and part in the hands of the receiver, says:
“We venture to add that it is better that the legislative power should be invoked to resolve the difficulty, and to provide for the protection of the rights of the parties interested in such cases by general laws, than that the courts should attempt to build a system out of the discordant and scanty material of positive enactments now to be found in the statutes.”
To justify a transfer of the principal or interest in the hands of the superintendent of insurance, express legislative authority must
Concurrence Opinion
I think Mr. Justice O’BRIEN’S position is in accord with a reasonable construction of sections 14 and 76 to 92 of the insurance law of 1892. It is not pretended that any possible public service can be subserved by a denial of the application. If the present statute is not broad enough, then further legislation must be had in the premises; otherwise, this large deposit will be unjustly diverted from one of the uses for which it was intended. This fact should not, of course, prompt a strained construction, and a reference to it is only made that the probable reason for the carefully chosen language of section 14 may be properly appreciated. It reads:
“So long as the corporation depositing the securities shall continue solvent and comply with the laws of the state, it shall be permitted by the superintendent to collect the interest or the dividends on such deposits.’’
By section 76 of the same act it is provided what shall be done with the securities in the event of insolvency. It is conceded that the defendant is solvent, but urged that section 14 requires something more in order to entitle it to collect the dividends and interest upon its securities, to wit, that it shall continue in the conduct of the business which prompted the incorporation. A sufficient answer would seem to be that the section says nothing of the kind. No reference is made to the business of the corporation or its conduct in the clauses concerning the collection of dividends and interest. Broader language is employed: “So long as it shall continue solvent and comply with the laws of the state, it shall be permitted” to collect dividends. The defendant is solvent, and complying with the laws of the state. It has concluded to pay its obligations and go out of business, as the statute provides that it may, and to that end it is strictly employing the methods and procedure provided by the law of the state. It would seem to follow that it is entitled to the dividends and interest.
Dissenting Opinion
I cannot concur in the conclusion of Mr. Justice O’BRIEN that this motion should have been granted. Although the superintendent is not required by any statute to collect the interest upon the securities deposited with him, it is only as long as the corporation depositing the securities continues solvent, and complies with the laws of the state, that it is permitted by the superintendent to collect the interest or dividends on such deposit. It is manifest that it was the intention of the legislature to allow the corporation, so long as it was continuing its business, to collect the interest upon its securities, because there is no provision for any one collecting this interest except in the contingency which has happened in the case at bar. In order to entitle the corporation to collect the interest, it must continue solvent, and comply with the laws of the state. This cannot have been intended to apply to a corporation which is in the hands of a receiver, because, although it may be solvent, it is not continuing its business, and does not come within the language which is claimed as an authority for the granting of the motion in question. It is undoubtedly true that the receiver is the successor of the corporation. But, where a statute confers upon a corporation the power to do a thing, it certainly is not intended that the receiver shall have the same power which the statute confers upon the corporation itself. Therefore, when the statute speaks of a corporation being entitled to collect this interest, it means an acting corporation, and not a corporation which has ceased to do business, and is in the hands of a receiver. I think the order appealed from should be affirmed, with costs.