People v. Troy Steel & Iron Co.

. This •action was brought in the month of March, 1893, by the plaintiff, as administratrix, to recover damages for the death of her husband, which, the complaint alleged, was caused by defendant’s negligence.

The defendant, a corporation, was dissolved by.a judgment of the Supreme Court in August, 1893, in an action brought by the Attorney-General in the name of the People of the State, and receivers appointed. On plaintiff’s motion, in March, 1894, an order was made at Special Term continuing the action against the receivers, and from such order this appeal is> taken.

The receivers could take an appeal either in their own name or in that of the corporation, and hence the appeal under consideration should be deemed that of the receivers in the name of the corporation. (Talmage v. Pell, 9 Paige, 410.)

It is held that a judgment in a sequestration action brought by a creditor against a corporation, under the provisions of section 1784 of the Code of Civil Procedure, appointing a receiver, does not dissolve the corporation or prevent the prosecution of actions against it, (Del Valle v. Navarro, 21 Abb. N. C. 136 ; Auburn Button Co. v. Sylvester, 68 Hun, 401 .)

A judgment, however, for the dissolution of a corporation and the appointment of a receiver in an action by the People of the State, brought under the provisions of section 1785 of the Code of Civil Procedure, ordinarily has the effect of preventing the maintenance of an action against the corporation ; and if actions are pending at the time of the rendition of such judgment they cannot be continued unless by order of the court by whom the judgment was rendered. (Sturges v. Vanderbilt, 73 N. Y. 384 -388.)

After such a judgment against a corporation, in the language of Field, J., in National Bank v. Golby ( 21 Wall. 609 -615): “Its existence as a legal entity was thereupon ended; it was then a defunct institution, and judgment could no more be rendered against it in a suit previously commenced than judgment could be rendered against a dead man dying pendente lite. This is. the rule with respect to all corporations whose chartered existence has come to an end, either by lapse of time or decree of forfeiture, unless by statute pending suits be allowed to proceed to judgment notwithstanding such dissolution.”

By chapter 295, Laws of 1832, it was provided that if a corporation shall have been dissolved by a decree of the Court of Chancery, or by expiration of its charter during the pendency of an action against it, the court shall have power, - on the application of either party, to make an order for the continuance of the action, and the

In People v. Knickerbocker Life Ins. Co. ( 106 N. Y. 619 -623), decided after the repeal of the act of 1832, Judge Danfortii in his opinion says: “ It is, therefore, plain that the funds in his hands should not be affected by it” — the judgment obtained after the appointment of the receiver — “ unless by interference or otherwise, under the direction of the court appointing him, he has made himself responsible for the final result of the litigation between the parties. (McCulloch v. Norwood, 58 N. Y. 563 .) His authority to do the acts relied upon by the respondents was derived from the court from whom he received his appointment, and its exercise was necessary for the protection of property which had come to his hands.”

In the above-cited case it will be seen that it was suggested that the receiver, under the direction of the court appointing him, might subject the funds in his hands to 'the payment of a judgment obtained after his appointment, as was held he could in McCulloch v. Norwood, decided when the act of 1832 was in force.

We think it was intended to confer on the Supreme Court by sections 755 and 756 {supra) the same power that was vested in the Court of Chancery by chapter 295, Laws of 1832, and hence the order appealed from was properly granted, unless the action (abated on the dissSlution of the corporation. Hndei section 755 actions that do not abate are those where the right of action survives or continues. Whether the action set out in the complaint herein is one that survived the dissolution, the death, of the corporation, is a question as to which we have entertained some doubt.

It is urged with much force that a judgment dissolving a corporation ends its existence; that on the rendition of such a judgment a corporation is extinct, and the same rule as to the survival of causes of action against it should apply as to survival in actions against an individual. In Greeley v. Smith ( 3 Story, 657 , 658) Judge Story says : “Now, I cannot distinguish between the case of a corporation and the case of a private person dying pendente lite. In the latter case the suit is abated at law, unless it is capable of being revived by the enactments of some statute, as is the case as to suits pending in the courts of the United States, where, if the right of action survives, the personal representative of the deceased party may appear and prosecute or defend the suit.”

As an original question, we should have entertained some doubts whether the cause of action set out in the complaint, the alleged negligence of the defendant in causing the death of the plaintiff’s intestate, was one that survived the dissolution of the corporation; and hence whether the court below had the right to continue the action against the receivers. But we have been cited to the opinion delivered by Justice Cullen of the second district in Hepworth v. Union Ferry Co. of Brooklyn, in which the learned justice reached the conclusion that an action for assault on a passenger of a ferry company by one of its employees, pending against the corporation on its dissolution in consequence of the expiration of its charter, survived, and, could be continued against the trustees of the corporation. The decision was affirmed by the General Term of the second department ( 62 Hun, 257 ). The appeal from the judgment of the General Term to the Court of Appeals was dismissed ( 131 N. Y. 645 ). We may assume that if the Court of Appeals had readied the conclusion in the consideration of the case that the action did not survive, and hence that the court below had no power to continue it, the appeal would probably not have been dismissed.

Under the doctrine laid down in Hepworth v. Union Ferry Co. the cause of action set out in the complaint in this action survived

Mayham, P. J., concurred in result; Herrick, J., not acting.

Order affirmed, with ten dollars costs, and printing and other disbursements.