Majority
p. 397Kalbfleish et al. v. Kalbfleish et al. .(Supreme Court, General Term, Second Department. February 11, 1891.)
Headnote
Receivers—Advances under Order oe Court.Where a receiver shows that he has among the assets of his assignor shares of stock of a corporation, that such shares are in immediate danger of becoming valueless by the inability of the corporation to pay its working expenses, the court may authorize the receiver to advance money to such corporation, taking security therefor, to enable it to continue its business.
Appeal from special term, Kings county.
Action by Albert M. Kalbfleish and another against Charles H. Kalbfleish, to dissolve the firm of Martin Kalbfleish’s Sons, which had failed. William Brookfield, as receiver of the property of Martin Kalbfleisch’s Sons, filed a petition showing that he had in his possession, as such receiver, certain shares of the stock of the Bushwick Chemical Works, which were in immediate danger of being rendered valueless by reason of the fact that the Bushwick Chemical Works was without funds necessary to enable it to continue its business. The court thereupon made an order authorizing the receiver to advance money to said corporation for the purpose of enabling it to continue its business, on condition that it convey to the receiver all its property to secure such advancements. Various creditors of the firm moved to vacate the order, and they appeal.
C. Bainbridge Smith, for appellants. Alexander <6 Green and Charles P. MacLean, for the receiver, respondent. Bergen c6 Dykman, Dillaway, Davenport c6 Leeds, Charles Robinson Smith, and Luden B. Chase, for other respondents.
The appellant contends that the order made August 6,1886, in effect, appointed a receiver of a corporation, and that the court had no jurisdiction to appoint such a receiver. The answer is that the order did not appoint a receiver, of a corporation or otherwise. It authorized a receiver, whose appointment is not questioned, to advance money for the benefit of a corporation upon terms which the court specified, and to which the corpora
p. 398
tian, by its board of trustees, afterwards assented. The loan was made, and lias been repaid. We are not able to see that it was unwise. So far as we can judge, no other course could have been discreetly pursued; and, were the wisdom of the order doubtful, the loches of appellants in waiting four-years before making complaint would deprive their present application of merit. We find nothing in the case requiring discussion. Order affirmed, with costs.