Owen v. Homœopathic Mutual Life Ins. — 31 N.Y. St. Rep. 600

Majority

p. 600

Sarah Owen Resp’t, v. The Homœopathic Mutual Life Ins. Co. et al., App’lts.

(Supreme Court, General Term, Third Department,

Filed May 26, 1890.)

Headnote

1. Parties—Receiver op corroratioh—Laches.

Where a corporation was dissolved, and a receiver was appointed, and the receiver gave plaintiff, who had an action pending against the corporation, the statut ory notice to present his claim, which he failed to do, Meld, that it was too late for plaintiff to apply, after practically all the assets had been distributed, that the receiver should be made a party to the action.

2. Same.

It cannot be said, within the meaning of Code Civ. Pro., § 756, that, when a receiver is appointed upon the dissolution of a corporation, there is a “devolution of liability ” upon him. His duty is to distribute the assets according to law.

Appeal by the receiver of the corporation, originally one of the defendants, from an order of special term substituting him as a party defendant in the stead of the corporation.

This action was brought in November, 1888, to set aside the compromise and surrender of a policy of insurance on the ground that the same was procured by means of a conspiracy between the

p. 601

corporation and its president to defraud plaintiff, for the restoration of said policy and payment of its amount.

In June, 1889, the corporation defendant was dissolved, and its president appointed receiver. He qualified, and served a copy of the order on plaintiff and her attorney, and also sent copies of the notices of the meeting of creditors and fixing the time for presentation of claims.

At the time when the motion for the order in question was made, April, 1890, the funds in the receiver’s hands had been paid out under orders of the court, except a small sum insufficient to pay the expenses of closing the receivership, and the receiver was about to apply for his discharge.

William H. Arnoux, for app’lts; William H. McCall, for resp’t.

It cannot be properly said that there is a “ devolution of liability ” when a receiver is appointed on the voluntary dissolution of a corporation. He does not become liable for the debts. His duty is to distribute the assets in the manner prescribed by law.

Possibly there may be cases where, for the purpose of determining the existence or the amount of a debt, he could be made a party to an action previously pending against the corporation. Though we do not see why, in most instances, those matters could not be determined in the proceeding under the statute in which the receiver was appointed. But however that may be, in the present case the receiver had advertised for claims under the statute; he had even served the plaintiff and her attorney personally with notice to present their claim; the plaintiff had presented no claim and the receiver, under the statute, had distributed the assets, reserving only enough to meet his expenses. After all this, the present motion was made. Under these circumstances it would be unjust, by making him a party to this action, to throw on him the expense of litigation; especially when there are no assets from which to pay the claim, should the plaintiff be successful.

The plaintiff urges that the question, how the debt is to be paid, if proved, is not before us; that that need not be determined until the plaintiff shall have succeeded in the action. But clearly the only hope of the plaintiff must be, under the circumstances, to compel the receiver to pay from his own funds. On what ground that could be urged we do not know. But at any rate we ought not to expose the receiver, who has followed the directions of the statute and has thus discharged his duty properly, to the expense of defending the action and to the risk of some attempt to make him personally liable.

The plaintiff had full notice of the time when claims were to be presented. If she had presented this claim, and any question had arisen whether it could be passed upon otherwise than in a formal action, she might at that time have made this motion. Then the receiver was in possession of funds and had not made

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his distribution. But whatever might have been done at that time, the plaintiff is now too late.

• ' The order is reversed, with ten dollars costs and printing disbursements.

Lardón and Mayham, JJ., concur.