Althause v. Giroux Consolidated Mines Co. — 135 N.Y.S. 500

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p. 500

ALTHAUSE v. GIROUX CONSOL. MINES CO.

(Supreme Court, Appellate Division, Eirst Department.

May 24, 1912.)

Headnote

Bankruptcy (§ 156*)—Right to Intervene on Appeal.

An action was brought for the penalty under Stock Corporation Law (Laws 1892, c. 688) § 53, providing that, a transfer agent of a foreign corporation shall, for every refusal to exhibit the transfer book and list of stockholders to a stockholder forfeit a certain sum to the person to whom the refusal is'made; and, before trial was had, plaintiff was adjudged a voluntary bankrupt. Thereafter- the plaintiff recovered a judgment, which was affirmed by the Appellate Term and appealed from. The plaintiff’s attorney had received no fee for his services. Held, that the trustee in bankruptcy,‘having taken no action until this time, could not

•For other oases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

p. 501

intervene before the termination of this appeal; the plaintiff’s attorney having a lien upon the recovery for his fees and being entitled to conduct the appeal.

[Ed. Note.—For other cases, see Bankruptcy, Cent. Dig. §§ 240-246; Dec. Dig. § 156.*]

♦For other cases see same topic & § number in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes

Action by Walter Althause against the Giroux Consolidated! Mines Company. Clarence F. Eldredge, as trustee, moves to be allowed to intervene while appeal is pending from judgment for plaintiff. Motion denied.

See, also, 132 N. Y. Supp. 1120 .

Argued before INGRAHAM, P. J., and McLAUGHLIN, SCOTT, CLARKE, and DOWLING, JJ.

Maurice Meyer, for appellant.

James A. Allen, for respondent.

This action was commenced in the year 1907 to recover a penalty under section 53 of the Stock Corporation Law (chapter 688 of the Laws of 1892), which provides that a transfer agent in this state of a foreign corporation shall, for every violation of that section, “forfeit the sum of two hundred and fifty dollars to be recovered by the person to whom such refusal was made”; the refusal being to exhibit to a stockholder the transfer book and list of stockholders of the corporation. While this action was pending but before judgment was entered, the plaintiff filed a voluntary petition in bankruptcy in the District Court of the United States for the District of Massachusetts, and, in pursuance thereof, the plaintiff was duly adjudicated a bankrupt, and on November 22, 1910, the petitioner was appointed his trustee in bankruptcy, and is still acting as such. Subsequent to such adjudication and the election of the petitioner as trustee, and on March 16, 1911, this action was brought on for trial, and plaintiff recovered a judgment in the Municipal Court, which was affirmed by the Appellate Term, whereupon an appeal was allowed to this court, which appeal is still pending and undisposed of. Subsequently the petitioner presented a petition to the United States District Court in bankruptcy in Massachusetts, and obtained an order authorizing the plaintiff to intervene in this action and take such action concerning the same as law and justice and the rights of creditors of the bankrupt may require. In opposition to this petition, the attorney for the plaintiff submits an affidavit stating that he has received no fees for his services in this action, and insists that the right of action being to recover a penalty was not transferable, and did not pass to the trustee in bankruptcy, and also claiming a lien on the recovery for his fees.

Without passing upon the question whether the trustee in bankruptcy is entitled to the proceeds of this judgment if it is affirmed, we think this application should be now denied. No application was made by the trustee in bankruptcy to intervene before the trial of the action in the Municipal Court or pending the appeal to the Appellate

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Term. The attorney for the plaintiff has undoubtedly a lien upon the recovery for his fees, and we think he should be allowed to conduct this appeal. In the event that the judgment is affirmed, the trustee in bankruptcy can take such action as he shall be advised to test the question as to whether the proceeds of the judgment should be paid to him for the benefit of creditors, or whether the plaintiff is entitled to receive the proceeds.

The motion is therefore denied without costs.