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Federman v. Standard Churn Manufacturing Co.

128 A.D. 493 Court First Department, Decision date 1908-11-06 English

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p. 493
Charles E. Federman, Respondent, v. Standard Churn Manufacturing Company, Appellant.
First Department,
November 6, 1908.

Headnote

Receivers pendente lite —sequestration of corporate property.
In an action for the sequestration of the property of a domestic corporation, a temporary receiver will not be appointed on the complaint alone, unsupported by affidavit or other evidence showing the necessity of the receivership.
Appeal by the defendant, the Standard Churn Manufacturing Company, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 10th day of August, 1908, appointing a receiver.
Wellesley W. Gage, for the appellant.

This action was brought for the sequestration of the property of the defendant, a domestic corporation. A motion was made for an order appointing a temporary receiver upon the complaint alone, unsupported by any affidavit or other evidence. From the order granting such motion this appeal is taken. This court said in Kieley v. Barron & Cooke H. & P. Co. ( 87 App. Div. 317 ): “ The court is authorized to appoint a temporary receiver in such an action (Code Civ. Proc. § 1788); but this does not justify the appointment of a receiver as a matter of right upon the bare allegations of the complaint alone. * * * This relief should not be awarded until final judgment, except in a case where it satisfactorily appears that it is essential to the protection of the plaintiff’s rights. There was no proof before the court of the necessity for the appointment of a receiver prior to final judgment. * * * Facts and circumstances with reference to the condition and management of the Corporate affairs, showing the necessity of the receivership pending the action in order to render effectual a final judgment in favor of the plaintiff, should have been shown.” That case was cited with approval in People v. Oriental Bank ( 124 App. Div. 747 ).

The order appealed from should be reversed, with ten dollars

p. 494
costs and disbursements, and the motion denied, with, ten dollars costs, with leave to renew.

Present — Ingraham, McLaughlin, Clarke, Houghton and Scott, JJ. ■

Order reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs, with leave to renew.

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