Case Name: In re MUEHLFELD et al. BOOTHE v. SPELLMAN
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1897-04-23
Citations: 45 N.Y.S. 16
Docket Number: 
Parties: In re MUEHLFELD et al. BOOTHE v. SPELLMAN.
Judges: 
Reporter: West's New York Supplement
Volume: 45
Pages: 16–21

Head Matter:
(16 App. Div. 401.)
In re MUEHLFELD et al. BOOTHE v. SPELLMAN.
(Supreme Court, Appellate Division, First Department.
April 23, 1897.)
Receivers—Motion to Determine Right to Property.
A receiver of a corporation cannot, by motion, compel its assignee for benefit of creditors to surrender the property.of the corporation where the assignment was made before the receiver was appointed, and the assignee 'was not a party to that proceeding. O’Brien, J., dissenting.
Appeal from special term, New York county.
Application by Frank Muehlfeld and Jack Haynes, a majority ■of the directors of the Muehlfeld & Haynes Piano Company, for a voluntary dissolution of said company. From an order directing William F. Boothe, assignee for the benefit of creditors, and his attorneys, to deliver to John H. Spellman, receiver, all the' books and to said in their said Boothe peals.
Reversed.
The facts are stated by Mr. Justice O’BRIEN as follows:
■ In the month of June, 1896 (on exactly what day in that month does not appear), a petition was presented by a majority of the directors of the corporation for a voluntary dissolution. Subsequent to the filing of such petition, and on the 9th of June, 1896, the corporation made a general assignment for the benefit of creditors to the appellant. On the same day the assignee took possession of all the books, papers, and property, of every kind and description, belonging to the company, and has continued in the actual possession thereof down to the present time. On the 30th of June, 1896, which was subsequent to the making of the general assignment, an order was entered in this proceeding appointing the respondent temporary receiver of the corporation; and he thereupon qualified and demanded of the appellant and his attorneys the delivery of the books of the corporation. This demand was refused upon the ground that the appellant was entitled to the possession of such books as assignee of the corporation. Thereupon the respondent made a motion to compel the appellant and his attorneys to summarily deliver such books to the respondent. Upon the hearing of that motion, the order now appealed from was entered.
Argued before VAN BRUNT, P. J., and BARRETT, RUMSEY, O’BRIEN, and INGRAHAM, JJ.
Edmund Luis Mooney, for appellant.
J. Delahunty, for respondent.

Opinion:
RUMSEY, J.
On the 20th day of June, 1896, John H. Spellman was, by an order of this court, appointed temporary receiver of the Muehlfeld & Haynes Piano Company, in proceedings which had before that time been taken for a voluntary dissolution of the corporation. He forthwith executed his bond and qualified as such receiver. Precisely when the proceedings for the voluntary dissolution of the corporation had been begun does not appear in the papers, but it is fair to assume that it was some considerable time "before the appointment of the receiver. After the receiver had qualified, he learned that on the 9th day of June,-1896, the Muehlfeld & Haynes Piano Company had executed to William F. Boothe a general assignment for the benefit of its creditors, which was recorded in the office of the clerk of the county of New York on the 10th of June, 1896; and that on the same day the assignee took possession of all the property and assets of the corporation, claiming to be the owner of them under the general assignment. Such being the condition of affairs on the 2d of July, 1896, the receiver demanded of the attorneys for the assignee the books of account of the company, which they refused to deliver to him, upon the ground that they held the books for the assignee, who was entitled to the possession of them. Thereupon the receiver procured an order to show cause why the assignee and his attorneys should not be directed to deliver to the receiver the books of account and all books and papers of the company in their possession, and for other relief. When that motion came on to be heard, an order was made directing the attorneys and the assignee to deliver to the receiver, not only the books of account and all books and papers of the company, but all property of the company, of every kind, in the possession of either of them. From that order this appeal is taken.
We do not think it necessary upon the determination of this appeal to examine into or decide the merits of the case so far as to determine whether the order appointing the receiver took precedence of the general assignment. The case, as we look at it, is not now in a situation where that question can properly be determined. It appears that the general assignee was no party to the proceedings for the appointment of a receiver, and that, before the receiver was appointed, he had taken into his possession all the property of the company, claiming that he had become the owner of it by virtue of the general assignment which had been executed and recorded. The proceeding was therefore one, not simply to determine the right of possession of the property, the title to which was not disputed, but to decide as to the ultimate right to the property of the company between two persons each of whom presented a paper title. The serious question, therefore, was the question of property. The receiver sought in this summary way to take away from the assignee the property of which he claimed to be the owner. We do not think it can be done in this way. When one claims as receiver the right to property which is in possession of a third person, who claims for any reason the right to retain it as owner, the receiver should proceed by suit in the ordinary way, unless in some way the claimant to the property has been made a party to the proceedings in which the receiver was appointed, so that the court has jurisdiction of him in that action. Parker v. Browning, 8 Paige, 388, 391. The right of a person to a trial by jury in every case where his property is sought to be taken from him is well settled,. and no one can be deprived of that right •unless his situation with regard to the proceeding in which it is sought to take away his property is such that the court has in that proceeding or action acquired jurisdiction, not only of the subject-matter, but of his person. It has not been made to appear here that the court had any jurisdiction over Boothe as assignee, in the proceedings for voluntary dissolution: As to that proceeding he was a stranger, and he stood in the same relation to the receiver appointed therein as any other stranger. For that reason we think that the court should not have granted this motion, but that it should have been denied, without prejudice to the right of the receiver to bring an action for the recovery of this property. Olmsted v. Railroad Co., 46 Hun, 552; People v. O'Brien, 111 N. Y. 62, 18 N. E. 692.
Order reversed, with $10 costs and disbursements, and motion denied, with $10 costs.
VAN BRUNT, P. J., and BARRETT and INGRAHAM, JJ., concur.