People v. Manhattan Fire Insurance — 77 A.D. 517

Majority

p. 517

The People of the State of New York, Respondent, v. Manhattan Fire Insurance Company of the City of New York, Defendant. Otto Kelsey, as Receiver of the Manhattan Fire Insurance Company of the City of New York, Appellant.

Headnote

Accounting by receivers of moneyed corporations— chapter 60 of the Laws of 1902 is applicable to receiverships created prior to its passage.

Chapter 60 of the Laws of 1902, which regulates accountings by receivers of moneyed corporations, affects the procedure only, and it was competent for the Legislature to make such statute applicable to accountings by receivers who had been appointed prior to its passage.

Appeal by Otto Kelsey, as receiver of the Manhattan Fire Insurance Company of the City of New York, from so much of an order of the Supreme Court, made at the Columbia Special Term and entered in the office of the clerk of the county of Albany on the 25th day of October, 1902, as denies said receiver’s motion to confirm the report of a referee appointed in June, 1902, to take and state the receiver’s accounts, etc., ascertaining and fixing his liabilities for legal expenses, attorney’s services or counsel fees for the year commencing May 11, 1901, and ending May 10, 1902.

G. D. JB. Hasbrouck and Russel 8. Johnson, for the appellant.

John O. Davies, Attorney-General, for the respondent.

We think the matter of accounting by receivers of corporations formed for banking or insurance is governed by the provisions of chapter 60 of the Laws of 1902, which went into effect February 26, 1902. As a question of procedure it is wholly within the control of the Legislature. The act referred to is not prospective only, but in plain terms is made to apply to all receivers of this class of corporations theretofore appointed.

“ § 9. This act shall apply to all actions for the appointment of receivers of monied corporations brought by the attorney-general, and to all receivers of such corporations heretofore or hereafter appointed, and to the settlement and adjustment of their accounts and distribution of assets in their hands, and all proceedings with reference thereto hereafter to be taken, and shall supersede and repeal all provisions of law inconsistent herewith.”

While the provisions of this law cannot affect the contract of employment of counsel made by the receiver before its passage, or payments made to counsel before its passage, it changes the old practice of partial settlements by a receiver, and the annual or semiannual accounting under Special Term orders which prevailed under the act of 1883 (Chap. 378, as amd. by Laws of 1885, chap. 40). People v. Knickerbocker L. Ins. Co., 31 Hun, 622 ; Matter of Commonwealth F. Ins. Co., 32 id. 78.)

The act of 1883, as amended by chapter 40 of the Laws of 1885, provided (§ 4) for a semi-annual statement showing the account of the receiver in detail to be filed—in cases of insurance companies — with the Superintendent of Insurance and with the Attorney-General, and to be presented to the Special Term of the Supreme Court, “■ and it shall be unlawful for any receiver of the character specified in this section to pay to any attorney or counsel any costs, fees or allowances until the amounts thereof shall have been stated to the Special Term in this manner, as expenses incurred, and shall have been approved by that court by an order of the court duly entered.” Under the law of 1902 (§ 6) it is provided, “ The receiver is not required or authorized to file any account, except as herein provided, except by special order of the court,” and no accounting is provided for except a final account or one specially directed by the court. It will also be observed that under the act of 1902 (§ 4) the receiver

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may employ one counsel and make such payment on account for legal services during the progress of the receivership as may be just and proper, on the written approval of the Attorney-General, subject, however, to investigation, allowance or disallowance by the court on final settlement when all parties interested can be heard. There seems to be no serious difficulty in this change as applied to unsettled matters, matters not disposed of under the old practice when the law of 1902 went into effect. It is a change of practice only, and interferes with no vested rights. The receiver was required under the old law to obtain an order of court before he paid counsel. The payment may be made now subject to approval of the court on final settlement. The law of 1902, we think, is controlling in the ease before us, and the Special Term order appointing a referee to state and pass upon the receiver’s accounts, which order was made after the act of 1902 went into effect, was unauthorized, and the order refusing to confirm the report of the referee was proper.

All concurred.

Order affirmed, without costs.