In re the Dissolution of Home Provident Safety Fund Ass'n

Majority

p. 437

In the Matter of the Dissolution of the Home Provident Safety Fund Association of New York.

(Supreme Court, General Term, First Department,

Filed June 26, 1891.)

Headnote

1. Receiver—Payments—Not liable for obeying improvident order of COURT.

Where a receiver makes payments, out of moneys and property transferred to him by a depository, under order of a court improvidently granted, he cannot, when required to return such money and property, be compelled to return such payments also, as a personal liability.

2. Same—Return of payments by parties receiving.

In such a case, the parties to whom the payments were made should return the same to the receiver.

Appeal by C. H. Daniels, as receiver'from part of order affecting him; by Hastings and Gleason from part of order affecting them; by Charles A. Jackson and Charles D. Burrill, respectively from part of order affecting them.

Nelson Smith, for app’lt, rec’r; Hastings & Gleason, for app’lt, in person; Charles A. Jackson, for app’lt, in person, and for Charles D. Burrill; Turner, McClure & Rolston, for the Farmers’ Loan & Trust Company, resp’t.

—We are of the opinion that so much of the order appealed from as directs the receiver to pay over the. funds and property received by him, to the Farmers’ Loan & Trust Company, should be reversed.

The receiver in making the payments made by him, was acting under the order of the court, and should not now have, in effect, a fine imposed upon him, for obeying an order which was improvidently granted.

The trust company as appears from the papers, must have had the order in its possession, as early as the 27th of January, 1890, and when it transferred the ten $1,000 bonds on the 13th of February following, it had had the order for at least seventeen days.

Without taking the advice of counsel, it voluntarily transferred the moneys and bonds, and it would seem to be too late for it now, as against the receiver, to question the propriety of the order. Even if this is not so, it may well be questioned, whether the trust company makes out a case under the order, entitling it to a return of the property ; upon this point, however, we .express no opinion.

The title to the property remained in the corporation, notwithstanding the execution of the trust deed, and upon the appointment of the receiver, the right to the possession of all the corporate property vested-in him. Atty. Gen. v. Guard, Mut. Life Ins. Co., 77 N. Y., 277 .

The cases cited by the ■ counsel for the trust company, do not hold a different doctrine

In the case of Matter of Guardian Mutual Life Insurance Company, 13 Hun, 115 , the court held that under the peculiar provisions of the acts relating to the superintendent of the insurance department, the distribution of the property of the insolvent corporation should be committed to that officer. It was not held that the property did not remain in the corporation. We are, however, of the opinion, that the parties to whom the receiver had distributed the moneys, under the order in question, should return the same to him, in order that upon a full hearing of the parties interested, such disposition may be made of the fund, as to the court shall seem just and equitable.

No costs to either party on this appeal.

Yan Brunt, P. j!, and Lawrence, J., concur.