Mutual Brewing Co. v. New York & College Point Ferry Co.

Majority

p. 149

Mutual Brewing Company, Respondent, v. The New York and College Point Ferry Company, Appellant.

Headnote

Oorp/yration — its title to its property is not divested by the appointment of a tempora/ry receiver — the assignee of a permanent receiver may be substituted in an action originally brought by the corporation after the appointirient of the temporary-receiver.

The appointment of a temporary receiver of the property of a corporation, in an action brought to dissolve it, does not divest the corporation of the title to its property undisposed of by the receiver, or deprive it of the legal capacity to sue for a tort, provided it brings its action before a permanent receiver is appointed.

A party to which the permanent receiver assigns the cause of action becomes the successor in interest of the original party plaintiff and is properly substituted as plaintiff in the action.

p. 150

Appeal by the defendant, The New York and College Point-Ferry Company, from an order of the Supreme Court, made at theWestchester Special Term and entered in the office of the clerk of the county of Queens on the 28th day of January, 1897, amending the summons by striking out the name of the plaintiff and inserting in lieu thereof the name of the Karsch Brewing Company.

W. J. Foster, for the appellant.

O. J. G. Fall, for the respondent.

The purpose of the action is to recover damages which it is' -alleged the plaintiff sustained for the loss of=merchandise, occasioned by the negligence of the defendant. The leading objection made by the defendant to the allowance of the amendment of the-summons is that- when the action was commenced no right of action was in the plaintiff for such relief, and that it then had no legal capacity to sue. This objection is founded Upon the fact that in June, 1893, one Edward Duffy was appointed receiver of the property of the plaintiff in an action brought by Paul Iialpin against it, and that afterwards, in December, 1895, he was also appointed receiver of that company in an action brought by the People of the State against the plaintiff company to dissolve it. The order appointing him contained the usual injunction provisions restraining-the company from interfering with its property. If, as argued by the defendant’s counsel, the plaintiff company was divested of title-to its property by -such appointment and -the qualification -of the receiver, it had no right of action, and, consequently, the Karsch Brewing Company could not be treated as the: successor in interest of the plaintiff, and without such relation could not properly be substituted as plaintiff. (N. Y. S. M., etc., Association v. Rem.Ag. Wks., 89 N. Y. 22 .) But those appointments of the receiver were provisional. He became a receiver pendente lite; as such he had the custody of the property of the company for its preservation, and was clothed with the incidental powers given by the court. The title of thq company was not divested to the property undisposed of by the receiver under the direction of the court until he was made permanent receiver, in May, 1896, pursuant to the final

p. 151

judgment in the action dissolving the corporation. (Code Civ. Proc. § 1788; Herring v. N. Y., L. E. & W. R. R. Co., 105 N. Y. 340 ; Decker v. Gardner, 124 id. 334.) In the meantime, and in March, 1896, this action was commenced. The question of disability of thp corporation after the appointment of the temporary receiver, of which advantage may have been taken by the direction of the court having the custody of' the property, is not available tO' the defendant, since the legal title to the alleged cause of action still remained in the plaintiff. On the dissolution of the corporation the appointment of the receiver was made permanent, and he became vested with title to its property and assets. He thereupon sold and transferred to the Karsch Brewing Company the subject or cause of this action and for which it was brought. The latter company thus becoming the successor in interest thereto of the original party plaintiff, was properly substituted as plaintiff in the place of that party. The cases of Christian Jensen Co. ( 128 N. Y. 550 ); Schuyler’s Steam Tow Boat Co. (136 id. 169), and Dickey v. Bates ( 13 Misc. Rep. 489 ) had relation to .receivers appointed in proceedings for voluntary dissolution of corporations, and, therefore, do not necessarily have any application to the question here.

The order should be affirmed.

All concurred.

Order affirmed, with ten dollars costs and disbursements.

Cases cited

New York State Monitor Milk Pan Ass'n v. Remington Agricultural Works 89 N. Y. 22 N.Y. 1882-04-18 p. 150
Herring v. New York, Lake Erie & Western Railroad 105 N. Y. 340 N.Y. 1887-04-19 p. 151
In re the Directors of the Christian Jensen Co. 128 N. Y. 550 N.Y. 1891-10-27 p. 151
Dickey v. Bates 13 Misc. Rep. 489 N.Y. Sup. Ct. p. 151