In re New Paltz & W. V. Railroad

In instituting these proceedings the defendants were acting as trustees, and the expenses they incurred while so acting were incurred in preserving the property, and should be paid out of the funds in the hands of the receiver, before all other liens, although the receiver was not appointed in an action brought by the bondholders or their trustee. Union Trust Co. v. Illinois M. Ry. Co., 117 U. S. 434 , 6 Sup. Ct. 809 . It was held in Barnes v. Newcomb, 89 N. Y. 108 , that where the officers of an insolvent corporation believe it to be solvent, and have reasonable grounds for such belief, it is their duty to oppose an application for the dissolution of the corporation, and their reasonable expenses in so doing should be allowed to them, to be paid out of the funds in the hands of the receiver. It seems to me that, if such expenses should be allowed, it is right to allow the expenses incurred in protecting the property by procuring the appointment of a receiver, especially in view of the fact that the directors of the corporation, who apply for the appointment of the receiver and the dissolution of the corporation, are not personally liable to the attorney for his services in the matter. Drew v. Longwell, 81 Hun, 144 , 30 N. Y. Supp. 733 . The referee has consented that his fee be reduced to the sum of $200, and the moving party hereto acquiesces. To that extent the order heretofore made will be modified. In other respects the motion is denied, without costs.