Case ID: ad_58/html/0436-01.html
Source: Caselaw Access Project
Author: {"author": "Rumsey, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Sigua Iron Company, Respondent, v. Harold P. Brown, Appellant.
    
      Corporation — action Try it to recover a call upon its stock — the fact that a receiver was appointed in another State befoi'e, and in the State of New York after, the action was brought does not affect it.
    
    Where a receiver of a corporation organized under the laws of West Virginia has been appointed in the Circuit Court of the United States for the eastern district of Pennsylvania and no effort has been made by such receiver to obtain possession or control of any of the assets of the corporation within the State of New York, the corporation may maintain, in its own name, an action in the State of New York to recover a call made by it upon its capital stock.
    The fact that an ancillary receiver of the corporation was appointed in the State of New York after the action was begun has no effect upon the right of the corppration to continue the action in its name.
    Appeal by the defendant, Harold P. Brown, from a judgment of the Supreme Court in favor of the plaintiff, entered in the, office of the clerk of the county of New York on the 20th day of November, 1900, upon the verdict of a jury rendered by direction of the court, and also from an order entered in said clerk’s office on the 15th day of November, 1900, denying the defendant’s motion for a new trial made upon the minutes.
    
      William F. Goldbech, for the. appellant.
    
      F. Burnham Moffat, for the respondent.
   Rumsey, J.:

The action was brought to recover calls made upon the defendant as thé owner of sixty shares of the assessable capital stock of the plaintiff corporation. The first objection taken by the appellant is that there was no sufficient proof that this certificate for sixty shares of stock had been issued to the defendant or that he was the owner of the shares. The evidence was partly contained in the stock book of the corporation, which is made competent evidence by section 929 of the Code of Civil Procedure. Upon one of the stubs in that book there was a statement that certificate No. 106 for sixty shares of stock, dated on the 9th day of July, 1890, was issued to Harold. P. Brown, the defendant in this action. There was pasted upon that stub a receipt in the following words* Received the above described certificate July 18th, 1890, Harold P.. Brown.” The signature upon this paper was admitted to be the signature of the defendant. Certificate No. 106 for sixty shares issued to Harold P. Brown was produced and admitted. In addition to that it was made to appear that the stock book showed no other certificate than. No. 106 ever issued to the defendant. There was also presented proof of various calls made upon the defendant in respect of this stock, and there were produced by the plaintiff letters signed by the defendant admitting the receipt of calls upon the sixty shares of which he was the owner, and inclosing checks in payment of certain of the calls which had been made. It was admitted that as to calls to the amount of $1,200 no part had been paid. There was not evidence upon the part of the defendant to contradict, or dispute or explain away this testimony. We think that that testimony was quite sufficient to warrant the jury in coming to the conclusion that that certificate receipted for on the stub was the assessable stock certificate mentioned in the complaint, and which it was shown had been issued to the defendant.

It is further objected that the plaintiff corporation had no right or legal capacity to sue, because that right had passed to a receiver which had been appointed in the Circuit Court of the United States for the eastern district of Pennsylvania, long before this action was brought. This suit was begun in this State oh the 15th of May, 1896. It appears that the plaintiff is a foreign corporation organized under the laws of West Virginia. On the 9th of February, 1894, in an action pending in the Circuit Court above mentioned, a decree was entered appointing Logan M. Bullitt, the president of the company, a receiver for the purposes of that suit and directing him to take possession of all the property and use it until the further order of the court. There is no pretense that any effort was made at that time to obtain control of the assets of the company in this State, or that anything was done in that respect until long after this suit was begun. The defendant claims that the necessary result of the appointment of this receiver was to deprive the corporation of all its assets in this State, and, therefore, as it had lost title to the assets it had no authority to bring this action. The effect of the appointment of the receiver in Pennsylvania was to vest in him the possession of, and perhaps the title to, the assets of the corporation within the jurisdiction of the court that made the appointment, and it may be conceded that within the rules of comity that receiver might have come into this State and taken possession of the assets, or might have brought an action for them in our courts; but until that was done the corporation was not divested of any of its assets in this Staté¡ The courts of this State could not take judicial notice of the appointment of this receiver in Pennsylvania, and the mere fact of his appointment, therefore, had nó effect upon the assets of the company here, and until some steps had been taken to reducé these assets to the possession of the receiver, not only was that corporation properly in possession of them, but it was also vested with the title so far as the courts of this State are concerned and so far as any other person is concerned in this State. Therefore, it was proper for the company in its own name to bring this action to collect this claim of which it was undoubtedly the owner.. The fact that an ancillary receiver was appointed in this State after this action was begun had no effect upon the ‘right of this company to maintain this action. Section 756 of the Code of Civil Procedure provides that in case of a transfer of interest the action may be continued, by the original party, unless the court directs the person to whom the interest- is transferred to be substituted in the action. It was perfectly proper, therefore, under the provisions of that section, even after Mr. Bullitt had been appointed ancillary receiver in this State, for him to continue this action if he saw fit to do so in the name of the Sigua Iron Company, and when he verified the amended complaint as receiver he accepted the action as it then stood, and as such he became responsible for its prosecution.

This judgment is a perfect protection to the defendant against any other action upon the claim set up in the complaint. He has no reason to complain, therefore, if it has been brought and prosecuted in the name of the real party in interest instead of in the name of the receiver.

There is no other question presented that requires any examination, and for the reason given above we think that the judgment and order should be affirmed, with costs.

Van Brunt, P. J., Patterson, Ingraham and Hatch, JJ., concurred.

Judgment and order affirmed, with costs.