Stephens v. Page

The principal question presented by this appeal is: Can a foreign corporation not having a place of business within the state be examined as a judgment debtor in supplementary proceedings for the purpose of the appointment of a receiver of its assets to be applied upon an execution? Section 2463 of the Code of Civil Procedure excepts from the provisions of the foregoing sections relating to supplementary proceedings domestic corporations and foreign corporations specified in § 1812, except in proceedings by or against the People. Section 1812 refers to and is to be read with § 1810, and is declaratory of the kinds of corporations which come within the provisions of such latter section. These corporations are domestic corporations and foreign corporations doing business within the state, or having therein a business agency or fiscal agency, such being the corporations referred to in § 2463. It is contended that since there is no mention in § 1812 of corporations not having a place of business within the state, that therefore the provisions of the Code relating to supplementary proceedings are applicable to the case at bar; but a careful reading of the enactment in question does not support this view. Section 1810 is express in its terms and declaratory of the cases where a receiver of the property of a corporation may be appointed. These cases do not include that of the appointment of a receiver in supplementary proceedings. Section 1812 prescribes over what corporations a receiver may be ap

Our conclusion is that the appointment of the plaintiff as, receiver of the McCall Publishing Company was unauthorized ; and this conclusion appears to be eminently reasonable in view of the familiar rule that preferences cannot be given to creditors of insolvent corporations. A contrary determination would in effect be a granting of such a preference. Hammond v. Hudson River Iron & Machine Co., 11 How. Pr., 29 .

So much for the respondent’s contention, but our determination of the question has the support of reason and authority upon still another ground. In order that supplementary proceedings ma}'be instituted, the execution must have been issued to the sheriff of the county where the debtor has (1) a place for the regular transaction of business in person, (2) where he resides, or (3) if he is not then a resident of the state, to the sheriff of the county where the judgment roll is filed, Code Civ. Pro., § 2458 ; which latter requirement necessarily implies residence in the state at the time of rendition of the judgment. None of these requirements can be met by a foreign corporation, and in no sense can such a corporation be a “ resident.” Moreover, the whole intent to be gathered from the sections of the Code relating to these proceedings is that the judgment debtor should be a natural person. Hinds v. C. & N. F. R. R. Co., 10 How., 487 . In Sherwood v. Buffalo & N. Y. City R. R. Co., 12 How., 136 , it is expressly held that supplementary proceedings are not to be taken against •corporations. These two last cited cases are adjudications under the old Code, but the provisions of the present Code with reference to these proceedings are, as far as this question is concerned, as much a re-enactment of the provisions of the old Code as though so enacted in express words. See also Fiero Spec. Pro., 519. It follows that since the proceeding was unauthorized in the first instance, the receiver appointed thereunder was without power to maintain the action now before us.

Our conclusion does not leave a creditor of a foreign corporation with property in the state, but with no place of business therein,, remediless, as is contended by respondent to be the case. Equity can afford relief under a state of facts similar to those before us, as was done, but without preferences, in Redmond v. Hoge, 3 Hun, 171 .

The judgment should, therefore, be reversed and judgment absolute for dismissal of the complaint should be directed in favor of 'the defendants, with costs.

Bischoff, J., concurs.