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Eustace v. New York Building-Loan Banking Co.

98 A.D. 97 Court N.Y. App. Div. English

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In the Matter of the Claim of Alexander C. Eustace and Joseph P. Eustace, Respondents, v. New York Building-Loan Banking Company and Charles M. Preston, as Receiver of Said Company, Defendants. John Cunneen, Attorney-General of the State of New York, Appellant.

Headnote

Dissolution of corporations — a copy of the papers on a motion for the reference of a claim against the receiver should be served on the Attorney-General.
Under section 8 of chapter 378 of the Laws of 1883, which provides, “ A copy of all motions and all motion papers, and a copy of any other application to the court, together with a copy of the order or judgment to be proposed thereon to the court in every action or proceeding now pending for the dissolution of a corporation or a distribution of its assets, or which shall hereafter be commenced for such purpose, shall, in all cases, be served on the attorney-general,” the Attorney-General is entitled to notice of a motion for the appointment of a referee to hear and determine a disputed claim filed with the permanent receiver of a corporation appointed in an action for the dissolution of such corporation.
Appeal by John Cunneen, Attorney-General of the State of Hew York, from an order of the Supreme Court, made at the Hew York Special Term and entered in the office of the clerk of the county of Hew York on the 9th day of May, 1904, denying the appellant’s motion made to vacate an order of reference theretofore entered in the above-entitled action.
Cornelius F. Collins, for the appellant.
J. P. Eustace, for the respondents.

On the 24th of February, 1904, in an action instituted by the People of the State of Hew York against the Hew York Building-

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Loan Banking Company for its dissolution, one Charles M. Preston was appointed a permanent receiver, and on the third of March following the firm of J. P. & A. C. Eustace presented a claim to the receiver for professional services rendered to, and disbursements made for, such corporation, amounting to $97,500. The receiver rejected the claim and offered to refer the same to some competent person to hear and determine. Subsequently the claimants and the receiver entered into an agreement, which, after reciting the fact .that the claim had been presented to the receiver and rejected, stipulated that the matter be referred to Hamilton Odell, Esq., a counselor at law of the city of Hew York, as sole referee to hear and determine the matter in controversy. On April 27, 1904, an order was made, without notice to the Attorney-General, approving this agreement and appointing the person named .as referee. On the 2d of May, 1904, the Attorney-General obtained an order to show cause, returnable on the sixth of May, why the above order of reference should not be vacated and set aside, and for such other and further relief as to the court should seem just.

It was claimed by the Attorney-General that he was entitled to notice of the application for the order of reference under section 8 of chapter 378 of the Laws of 1883, known as the Haggerty Act. The section provides that “A copy of all motions and all motion papers, and a copy of any other application to the court, together with a copy of the order or judgment to be proposed thereon to the court, in every action or proceeding now pending for the dissolution of a corporation or a distribution of its assets, or which shall hereafter be commenced for such purpose, shall, in all cases, be served on the Attorney-General.”

This motion was denied, and from the order thereupon entered, this appeal is taken.

The court below undoubtedly based its decision upon the opinion which was handed down by this court in the case of People v. American Steam Boiler Ins. Co. ( 3 App. Div. 504 ), in which the learned judge writing the opinion discussed the question as to whether the Attorney-General was entitled to notice, and held that such notice was not required; and in this opinion the court apparently concurred.

It will be seen, however, on an examination of that case, that the

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question involved in the case at bar did not necessarily arise in the case of People v. American Steam Boiler Ins, Co. In that case a party who had consented to a reference -and had participated in it, when beaten sought to relieve himself of the adverse decision by claiming that the Attorney-General should have had notice; and the court held that it was too late for him to raise the question, the Attorney-General making no complaint. This was all that was authoritatively decided and all that was necessary to be decided by that case. It is true, as already stated, that the judge who wrote the opinion proceeded to discuss the question now involved, and expressed his opinion upon the subject. It is also true that the other members of the court appear to have concurred in the opinion; but such concurrence by no means involved an adoption of all that was said in the opinion, as it appears upon the face of the opinion that it was decided upon another ground. Such an enunciation of the law is of no weight in this case, as the question now presented was not properly before the court in that case, and what was said about it was entirely obiter. That such a decision has no binding force was recently announced by the Court of Appeals in the case of Crane v. Bennett ( 177 N. Y. 106 ). In that case the court say : “c It was not our intention to decide any case but the one before us, "x" * * and our opinion should be read in the light of that purpose. If, as sometimes happens, broader statements were made, by way of argument or otherwise, than were essential to the decision of the questions presented, they are the dicta of the writer of the opinion, and not the decision of the court. A judicial opinion, like evidence, is only binding so far as it is relevant, and when it wanders from the point at issue it no longer has force as an official utterance. ’ (Stokes v. Stokes, 155 N. Y. 581 , 594; Roberson v. Rochester Folding Box Co., 171 N. Y. 538 , 551.) It cannot be reasonably expected that every word, phrase or sentence contained in a judicial opinion will be so perfect and complete in comprehension and limitation that it may not be improperly employed by wresting it from its surroundings, disregarding its context and the change of facts to which it is sought to be applied, as nothing short of an infinite mind could possibly accomplish such a result. Therefore, in applying cases which have been decided, what may have been said in an opinion should be confined to and limited by the facts of the case under consideration
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when the expressions relied upon were made, and should not be extended to cases where the facts are essentially different. When this rule is followed, much of the misapprehension and uncertainty that often arises as to the effect of a decision will be practically avoided.”

This necessarily brings us to a brief consideration of the question as to whether applications of this description come within the purview of the act cited. It may be that they do not come strictly within the letter of the act; but they certainly are embraced within its spirit. The statute provides that the report of the referee in a proceeding of this character shall be filed in the office where the order for his appointment is entered, and shall be conclusive as to the rights of the parties, unless set aside by the court.

This proceeding, resulting in a conclusive judgment between the parties, would make it an idle ceremony to require notice to be given to the Attorney-General when application was made for the distribution of the assets of the corporation towards the payment of these claims only after they had been conclusively established. He would then be tied hand and foot by the judgment; and no method whatever is suggested by which he might be able to sift the merits of the claim, as he could have done if he had had notice and could have appeared before the referee.

It seems to us that the establishment of claims against the estate is a .very important step in a proceeding for the distribution of the assets amongst the persons entitled thereto.

We think, under these circumstances, that the Attorney-General should have had notice of this application and that the motion to set aside the order of reference should have been granted:

The order should be reversed, with ten dollars costs and disbursements, and the motion to set aside the order of reference granted, without costs.

Present—Van Brunt, P. J., Patterson, O’Brien, McLaughlin and Hatch, JJ.

Order reversed, with ten dollars costs and disbursements, and motion to set aside order of reference granted, without costs.

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