Carson v. New York Terminal Express Co. — 26 N.Y.S. 639

Majority

p. 639

CARSON v. NEW YORK TERMINAL EXP. CO.

(Supreme Court, General Term, First Department.

December 15, 1893.)

Headnote

Receivers—Appointment—Modification oe Restrictive Clause.

Where an order appointing a receiver restrains all actions against the corporation, a motion by a creditor to vacate the order as to him should not be granted merely on the ground that the corporation bought goods from him when it was insolvent, and was known to be so by the directors, without any showing that such creditor was entitled to perfect his judgment in preference to other creditors, or that a judgment would be of any avail to him if perfected.

Appeal from special term, New York county.

Action by Joseph P. Carson against the New York Terminal Express Company for the appointment of a receiver. From an order modifying an order appointing a receiver, so as to allow D. D. Mangam & Co. to perfect their judgment in default of action against said company, defendant company appeals.

Reversed.

Argued before VAN BRUNT, P. J., and O’BRIEN and PARKER, JJ.

Alexander & Green, (C. B. Alexander, of counsel,) for appellant.

Frank D. Arthur, for respondents.

In this action a receiver was appointed of the defendant ancillary to appointment in the state of New Jersey. An order was granted by the special term that all persons be enjoined and restrained from bringing or prosecuting any suit against the defendant, or in any manner interfering with its assets until the further order of the court. A condition was made of granting this order that the defendant should not remove from this state any of its property. A motion was made by the respondents, D. D. Mangam & Co., creditors of the defendant, for the vacation of this injunction so far as it affected them, which motion was granted, without any reason therefor appearing in the affidavits upon which the respondents moved, except the statement that the defendant was insolvent at the time it bought the goods and merchandise of the respondents, and that the directors of the defendant company knew at the time that it was insolvent. It is claimed upon the part of the respondents that the questions on this appeal resolve themselves into—First, whether the creditors (the Mangams) have any right to perfect their judgment; and, second, whether any further proceedings under the judgment are necessary. There was nothing in the papers upon which this order was granted to show any propriety in allowing these respondents to perfect their judgment in preference to other creditors; and there was nothing whatever in the papers to show that any proceedings under the judgment could be taken by the respondents which would be of any avail to them after the appointment of receivers. We think, therefore,' that the order was improvidently granted, and should be reversed, with $10 costs and disbursements, and the motion denied, with $10 costs.