Metropolitan Life Insurance v. Sanborn

the way. The order appointing the defendant receiver merely authorized him to “immediately take possession of all the property and effects, real and personal, of every name and nature, of said corporation, and hold and administer the same according to law.” The justice, on these facts, rendered judgment for the plaintiff against the defendant individually for the November and December rent sued for. There was no authority for this. If the defendant was liable at all, he was liable as temporary receiver only. It is to be observed that the action was not for the use and occupation, but on the contract of lease for a stipulated monthly rental. There is certainly no privity of contract between the defendant in his individual capacity and the lessor. He has entered into no contractual relation with the plaintiff which would make him liable on the covenant to pay rent. Nor is there privity of estate. There is not, and could not be under the facts of this case, any relation of lessor and lessee between the plaintiff and the defendant as an individual. Not even in his representative capacity would this follow as a matter of course. Ordinarily, a temporary receiver has no title to the property or assets of the corporation, but merely their possession. Code, §§ 1788, 2423; Keeney v. Insurance Co., 71 N. Y. 401 ; Decker v. Gardner, 124 N. Y. 334 , 26 N. E. 814 , 11 L. R. A. 480 . He cannot become liable for rent from the mere fact of taking possession of the premises. It may be questioned whether a receiver pendente lite,—the ordinary chancery receiver or mere custodian of corporate property,—in the absence of express authority pursuant to statute (Code, supra), granted by the court, conferring upon him some or all of the powers of a permanent or administrative receiver, ever becomes “liable,” in the strict sense of that term, by virtue of any privity of estate arising out of his acts in the course of the preservation of the property. There is, correctly speaking, no such election to adopt the lease within a reasonable time, and thereby create a privity of estate, as in the case of a permanent receiver, having title to the corporate assets. Stokes v. Hoffman House, 46 App. Div. 120 , 61 N. Y. Supp. 821 . The court, in the exercise of its equitable discretion, may deem it proper to direct him' to pay the rent, but, as said by Barrett, J., in the case just cited, “That is an equity for the court to consider, not the custodian.” The case before us fails to disclose that the temporary receiver, either by express authority granted by the court, or otherwise, ever became privy to the lease. The order appointing him was strictly lifnited to according him possession without any title, and it is very questionable whether the defendant, even in his representative capacity, can be held on a theory of privity. Gertain it is, however, that as an individual he has succeeded to nothing belonging to a corporation still in existence and clothed with its franchise at the time this suit was brought, and that no action on the covenant to pay rent will lie against him individually on a lease to which he was neither privy nor party. The only possible theory on which the defendant could be personally liable would be in the event that he had been guilty of some neglect or misconduct, or that he had contracted in excess of his authority, or had assumed to enter into an obligation in his

individual capacity. Manufacturing Co. v. Smith, 45 App. Div. 364 , 60 N. Y. Supp. 849 ; Camp v. Barney, 4 Hun, 373 ; Manufacturing Co. v. Garden, 52 App. Div. 363 , 65 N. Y. Supp. 147 ; Cook, Stock, Stockh. & Corp. Law, 878; Bead, Rec. 305. There is no pretense that he has been guilt}- of neglect or misconduct; there is not an iota of proof that he contracted in excess of his authority, or that be made any contract at all; and, so far from there being proof that be assumed to act in his individual capacity, the testimony of the plaintiff’s sole witness contains a specific disclaimer of such assumption in the statement that the defendant purposed applying to the court for leave to pay over the rent from the subtenants. All that appears is that the defendant was in the offices of the corporation which was dissolving, and continued occupying them in behalf of the corporation. The lease itself remained a continuing contract of the corporation, under which it remained liable for the full extent of the term. In any event, the plaintiff could share with the general creditors pro rata in the assets of the corporation for the entire unpaid rental of the balance of the term, and probably could secure payment as a preferred creditor for the two months that it actually remained in possession of the offices through the defendant in his representative capacity. But the record is barren of any fact on which to predicate a personal claim against him. The two cases cited by the plaintiff are not in point. People v. Universal Fire Ins. Co., 30 Hun, 142 , was a case in which a permanent receiver was directed to pay, as a necessary expense and a charge upon the funds in his hands, rent for premises which he had not promptly abandoned. The question of the personal liability of a temporary receiver under similar circumstances was in no wise passed upon. And in Rogers v. Wendell, 54 Hun, 540 , 7 N. Y. Supp. 781 , 8 N. Y. Supp. 515 , the receiver, though a temporary one, was held personally liable because he had entered into a contract with the plaintiff’s intestate in excess of the authority conferred upon him by order of the court. The judgment must be reversed.

Judgment reversed, and a new trial ordered, with costs to the appellant to abide the event. All concur.