Case ID: misc_9/html/0245-01.html
Source: Caselaw Access Project
Author: {"author": "Fitzsimons, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

James T. Hall, as Receiver, v. The Holland House Co.
    (City Court of New York—Trial Term,
    June, 1894.)
    In an action by a receiver of an insolvent corporation, a claim against such corporation cannot be allowed as a counterclaim or offset, unless the same accrued prior to the insolvency of the corporation and appointment of the temporary receiver.
    Action for work, labor and services performed for defendant by the corporation of which the plaintiff is receiver.
    
      Lachman, Morgenihau & Goldsmith, for plaintiff.
    
      Coudert Brothers, for defendant.
   Fitzsimons, J.

The James T. Hall Co., a foreign corporation, became insolvent, and a temporary receiver of its property was appointed on October 11, 1893, and October 26, 1893, said temporary receiver was duly made permanent receiver. On October twenty-sixth a note of James T. Hall Co. for $500 was indorsed over to defendant by one Mary J. Van Doren; the note became due October sixteenth.

This action is brought by plaintiff, as permanent receiver, to recover $589.85 and interest, for work done by the James T. Hall Co. for defendant, and defendant seeks to interpose as an offset or counterclaim the note of $500 above mentioned.

The question presented is whether the note made by the Hall Co. is a proper counterclaim herein.

. The defendant’s cause of action against plaintiff accrued October twenty-sixth. On that day, and since October eleventh, the Ha]l Co. was an insolvent corporation; its property had passed out of its possession; it had no control over or interest in said property until its affairs were duly settled; that property was the property of the creditors of said corporation, and no claim can be made the subject of an offset or counterclaim by defendant against plaintiff’s cause of action unless it accrued prior to the insolvency of the Hall Co., which in this case occurred at the time of the appointment of a receiver, on October eleventh. The fact that the receiver then appointed, was a temporary one, in my judgment, does not benefit defendant. The rule of law applicable to this case seems to me to be that defendant’s claim against the Hall Co. will not be allowed as an offset or counterclaim against its receiver unless said claim accrued prior to its insolvency and appointment of the receiver. Fera v. Wichham, 135 N. Y. 230.

In view of this ruling, I deem it unnecessary to consider the other points presented by plaintiff’s counsel. I disallow the counterclaim and give plaintiff judgment for the amount claimed, with interest and costs and five per cent allowance.

Ordered accordingly.