85 N.Y.S. 137 | N.Y. App. Div. | 1903
In 1895 the United States Mutual Accident Association of the city of New York, a mutual co-operative insurance company organized \mder chapter 175 of the Laws of 1883, was dissolved by a judgment of this court in an action brought for that purpose by the Attorney-General, and Henry Winthrop Gray, the appellant herein, appointed a permanent receiver thereof. The Superintendent of Insurance of the State of New York at the time the receiver was appointed held securities of the value of $10,000- which had been deposited with him by the corporation in pursuance of section 215 of chapter 690 of the Laws of 1892. These securities belonged to such policyholders of the company as paid all of the assessments levied upon their respective policies from the time of issue to the dissolution of the corporation. (People v. Family Fund Society, 31 App. Div. 166.) Subsequent to the appointment of the receiver an act was passed -which directed that the securities held by the Superintendent of Insurance be transferred by an order of the Supreme Court to the receiver of the corporation to be distributed — or the proceeds thereof—by him “ among the respective holders of
We think upon the authority of Platt v. New York & Sea Peach Railway Co. (170 N. Y. 451) the order appealed from must be reversed. In that case a receiver was appointed in an action brought to foreclose a mortgage for the benefit of Certain bondholders, and he was directed to take possession, with other property of the' railroad company, of certain moneys earned by it before his appointment. Such money he was subsequently directed by an order of the court to pay to the trustees of the bondholders after deducting the expenses of the receivership. This money belonged, not to the bondholders, but to the general creditors of the-corporation, and they had no notice of the application for the .order which directed payment to the trustees of the bondholders. Thereafter a general judgment creditor brought an action against the railroad for the purpose of sequestrating all its assets and appropriating the same to the payment of the judgment, and in that action another receiver of the defendant’s property was appointed, who subsequently made a motion in the foreclosure action to vacate the order-appointing the receiver therein, in so far as the moneys on hand at the time of his appointment were concerned; that the judgment entered therein be amended by an entry at the foot of the decree that the mortgage foreclosed was not and never had been a lien on the rents and profits which had accrued prior to the entrance and possession of the foreclosure receiver, and that that receiver-be ordered to pay to the sequestration receiver the amount of the money on hand at the time of the appointment of the former receiver. The motion was denied, and on appeal to the Appellate Division the. same was reversed and the motion granted (63 App. Div. 401), but on appeal to the Court of Appeals the same Was reversed, that court holding that while the moneys sought to be reached belonged in equity to the general creditors, in preference to the bondholders —and to this extent the Orders were erroneous — that, nevertheless, the same were not void, inasmuch as the court had jurisdiction of the person and subject-matter of the
Nor do we think the Attorney-General was in a position to ask that the orders settling the receiver’s accounts be vacated. His predecessor in office had notice of every step taken in those proceedings. Copies of the receiver’s accounts were served upon him and he had notice of the appointment of the referees — indeed, attended before the referees, or some of them, and took part in the hearings. He also had notice of the application to the court for
The position of the policyholders is different, and, independent of authority, we should feel inclined to affirm the order so far. as it affects them. They had no notice of the proceedings which resulted in the previous orders, but, under the decision of the Platt case, we. do not think this .gives them the right to have them vacated. In the Platt case the money which was on hand at-the time the receiver was appointed in the foreclosure action belonged to the general creditors of the corporation, and they had no notice of the orders which directed, that this money be paid to the trustee of bondholders. The court, nevertheless, held that the judgment creditors could not have the orders set aside, and that the foreclosure receiver was protected in the payment which he made. This decision, therefore, seems to be decisive in the present case . so far as the policyholders are conoerned.
The order appealed from, therefore, must be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.
Van Brunt, P. J., O’Brien and Hatch, JJ., concurred.
Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.