Case ID: misc_16/html/0309-01.html
Source: Caselaw Access Project
Author: {"author": "Chester, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Matter of the Application of The Corning Foundation et al.
    (Supreme Court, Albany Special Term,
    March, 1896.)
    Chancery fund — Disposition of.
    The court will not interfere with the possession by the state of the chancery fund for the benefit of eleemosynary or charitable institutions; the only parties having a legal right to move the court with reference to this fund are the - owners now unknown or their legal representatives, and the state, its custodian.
    Motion for an order directing a transfer of the chancery fund to the petitioners.
    Barnwell It. Heyward, for petitioners.
    T. E. Hancock, attorney-general, and G-. D. B. Hasbrouek, deputy attorney-general, opposed.
   Chester, J.

This is a motion made by the Corning Foundation for Christian Work in the Diocese of Albany, The Albany City Homoeopathic Hospital and Dispensary, The Albany Hos- ■ pital and St. Peter’s Hospital, all of Albany, for an order directing the comptroller of the state to transfer what is known as the chancery funds now in his possession to the petitioners, in equal parts, upon such security as the court shall direct, to be held by them subject to the order of the court for the payment of the whole, or any part thereof, with interest, to the lawful owners thereof.

These four petitioners are domestic corporations of ah elee-' mosynary or charitable nature, and eaóh conduct hospitals at Albany for the. furnishing of surgical and medical aid to the indigent, the expense of which is supplied by those charitably disposed. It is alleged that the petitioners are owners of real estate worth $200,000 over all incumbrances; that their running expenses are large and continually increasing; that they are unable to furnish sufficient accommodations for those in need of their assistance, and that they desire to procure a loan óf thesé funds' to enable them' to enlarge their buildings and procure the necessary and proper. conveniences or appliances-for their work.

The chancery funds in question consist of property, securities and moneys, amounting to the sum of about $175,000, as stated in the petition, which represents what is left of the surplus moneys paid into court and unclaimed deposits on hand at the time of the abolition of the Court of Chancery in 1846.

The funds were held by the clerk of the Court óf Appeals, pursuant to section 5 of chapter 277, Laws of 1848, until about the middle of. May, 1894, when he transferred their possession to the comptroller, pursuant to chapter 135, Laws of .1894.

The last-mentioned act was passed March 15, 1894, and provides: “ That the clerk of the Court of Appeals shall transfer to the comptroller of the. State all the moneys, securities and real estate which he now holds, or which he has now in his custody, as part of the funds and property formerly under the control and in the possession of the Court of Chancery, or in any manner appertaining thereto. The comptroller shall give a receipt to-said clerk for such moneys, securities and evidences of title and thereupon the comptroller shall be vested with the same possession of such property as is now vested in the, clerk of the Court of Appeals.”

By chapter 818, Laws of 1895, it is provided, that “ The comptroller shall, as soon as it may be practicable, sell or otherwise convert into cash the securities in which the fund known as the Chancery fund is invested, at their fair market value; and the proceeds of such sale or conversion shall, as received, be credited ■ to the general fund and deemed a part thereof, and all moneys on deposit to the credit of such fund, or which may be hereafter received for interest or otherwise, shall, in like manner, be credited to the general fund and be deemed a part thereof. The treasurer shall pay from such fund the amount due any person as tiwner of a portion thereof, upon the warrant of the comptroller. The comptroller shall draw his warrant for such sum upon presentation to him of an order made by a court of competent jurisdiction after due notice to said comptroller.”

The intent of the act of 1895 above cited is probably to convert the entire fund to the uses of the state, leaving the state liable, however, to pay- from its' general fund the amount which may be found due to any person as the owner of a portion thereof upon the order óf a court of competent jurisdiction after notice to the comptroller.

The petitioners concede that if the act of 1895 can be sustained-their application cannot be granted, but they claim that the act is unconstitutional and void for the reason, among others, that it-appropriates private property to public use without due process of law, and does not, therefore, stand in' the way of the relief they seek. They also claim that under a provision of article 6, section 6 of the Constitution of 1846, which is retained in article-6, section 1 of the Constitution of 1894, and under the Judiciary Act of 1847, chapter 280, section 71, the Supreme Court still has jurisdiction over the funds and has power to grant this motion.

Under the view' I entertain of the matter, it is not necessary on this motion to determine the constitutionality of the act in-question.

If we assume, for the sake- of the argument, that the act of 1895 is unconstitutional, as the petitioners contend, and that the funds are in the possession of the comptroller, whether lawfully or not, the same as they had formerly been in the possession of the clerk of the Court of Appeals, and if we also assume that this court still has jurisdiction to direct as to the care, investment and control of the funds, then the order asked for here is one-resting in the discretion of the court. The attorney-general claims this and the petitioners concede it.

Should, the court exercise this discretion in favor of these petitioners and grant this application? It seems to me clearly not.

The petitioners ask the court to make them the depositories of the funds in question in equal proportions. They are not seeking to procure a loan or a direction that the comptroller make am investment of these moneys, or a portion of them, upon a mortgage upon their real estate, to be repaid with interest at the maturity of the mortgage. They simply want to hold the fund' in the place of the comptroller, subject to the order of the court, if any- claimants to the fund, or any part of it, should ever appear to- invoke such order, and with the expectation that no such 'claimants will ever appear, and that, therefore, the moneys may be applied perpetually to their uses. This was expressly claimed upon the argument, and the course was justified by the fact that whatever benefit would be derived from the use by the petitioners of these funds would go to alleviate the sufferings of the sick and needy. No one will question, the commendable, character of the work carried on by the petitioners. The institutions maim tained by them ‘ are worthy not only of liberal public support but of the aid of all, and especially of charitably disposed persons.

. Notwithstanding the humane and charitable character of the work of these institutions, they are strangers to these funds. They have no. interest or property in the moneys in question. They have no better standing to ask the court to compel the comptroller to transfer this large fund to them than have the hundreds of other equally deserving eleemosynary and charitable institutions throughout the state to ask like relief.

The only parties having a legal right to move the court with. reference to these chancery- funds are the owners, now unknown, or their legal representatives, and the state, the custodian.

The state is lawfully in possession of these funds and may properly defend its possession against every one but the. owners. When tire court is asked, therefore, to permit a conversion of these funds, to a charitable use, no matter how worthy the object may be, it is proper for the state not only to question" the power of the court to' so direct, but to defend its possession as against parties having no interest.

The Code of Civil Procedure does not provide that the court pray be set in motion by parties having no interest (§§ 446 to 460), and until it is, it «should not, in my opinion, exercise its discretion against the state, which has managed and preserved these funds for nearly fifty years since the Court of Chancery was abolished, but rather .should' exercise it in favor of the state, and in deference to" the legislative will, as expressed in the act of 1895 above quoted, whether that act is unconstitutional or not.

If these moneys have been abandoned- to the state by their owners, as now seems probable, they are more properly .the subject of legislative than of judicial disposal.

The motion is, therefore, denied.

Motion'denied. 1