Case Name: James B. Hammond, as Administrator, etc., of Frederick S. Barstow, Deceased, Respondent, v. National Life Association, Defendant. Frederick A. Betts, as Receiver of the National Life Association, Appellant
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1901
Citations: 58 A.D. 453
Docket Number: 
Parties: James B. Hammond, as Administrator, etc., of Frederick S. Barstow, Deceased, Respondent, v. National Life Association, Defendant. Frederick A. Betts, as Receiver of the National Life Association, Appellant.
Judges: 
Reporter: Appellate Division Reports
Volume: 58
Pages: 453–459

Head Matter:
James B. Hammond, as Administrator, etc., of Frederick S. Barstow, Deceased, Respondent, v. National Life Association, Defendant. Frederick A. Betts, as Receiver of the National Life Association, Appellant.
Judgment of dissolution of a corporation in the State of its creation—effect thereof in the State of New York—right of a receiver appointed in the State of New York as against a prior attachment creditor.
July 7, 1899, a judgment of a court of competent jurisdiction in the State of Connecticut was entered, dissolving a corporation organized under the laws of that State and appointing a receiver thereof. July 15, 1899, a creditor of the corporation, residing in the State of New York, brought an action against the corporation in that State to recover his debt, and on the twenty-ninth day of July obtained a warrant of attachment against the corporation and finally obtained judgment in the action by default. July 28, 1899, an action was brought against the corporation in the State of New York which resulted in the appointment of an ancillary receiver of the corporation to take possession of, and administer, the assets of the corporation in the State of New York.
On a motion made by the ancillary receiver to vacate the warrant of attachment and the judgment obtained in the creditor’s action,
Held, that the ancillary receiver was not in a position to raise the objection that the corporation ceased to exist when the judgment of dissolution was entered in the State of Connecticut and that no action could thereafter be brought against it in the State of New York, as if the corporation did not exist when • the creditor’s action was brought, it certainly did not exist when the action in which the ancillary receiver was appointed was begun.
Semble, that until steps were taken in the State of New York to enforce the judgment of dissolution, the status of the corporation in that State was not .changed nor the remedies of creditors of the corporation residing therein taken away, and that the courts of the State of New York had jurisdiction to grant the warrant of attachment and judgment. .
Ingraham, J,, dissented.'
Appeal by Frederick A. Betts, as receiver of the National Life Association, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New' York on the 30th day of April, 1900, denying his motion to vacate and set aside a warrant of attachment and to vacate and set aside the judgment in the action.
Gfiarles Gibson Bennett, for the appellant.
J. Gulbert Palmer, for the respondent.

Opinion:
Rumsey, J.:
The defendant is a Connecticut corporation authorized to do business in this State under the laws thereof, and which had.issued to the plaintiff's intestate a policy of insurance upon which this action was brought on the 15th day of July, 1899. On the 7th of July, 1899, in an action pending in the Superior Court for the county of Hartford, in the State of Connecticut, against the National Life Association, Frederick A. Betts was appointed receiver and a judgment was entered dissolving the corporation. On the. 28th of July, 1899, an action was begun in this State by one Albert Freeman against the National Life Association for the purpose of procuring the appointment of an ancillary receiver to take possession of the assets of the association in this State, and to administer them. . In that action Betts was appointed ancillary receiver, and he thereupon made this motion in this action to vacate the writ of attachment and the judgment which had been obtained by default, basing his right to do so upon the fact that he represented the dissolved corporation as receiver. The motion was denied, and from the order denying it this appeal is taken.
It is claimed by the appellant here that as the Connecticut corporation was dissolved by the judgment of a court of competent jurisdiction in that State before this action was brought, no action can be maintained against it, and for that reason the court here was without jurisdiction either to issue the writ of attachment' or to enter a judgment in that action.
When the order of the Connecticut court was made it operated to transfer to the receiver therein appointed all the assets of the association in that State, but such an order has never yet been construed in the courts of this State to take away the title of the corporation to its assets here so far as to deprive the courts of this State of the right to control these assets for the benefit of domestic creditors. (Barth v. Backus, 140 N. Y. 230 ; Mahon v. Ongley Electric Co., 156 id. 196.) So far as these assets are concerned, it has been the policy of this State to retain the control of them for the benefit of our own creditors, and where a creditor has by legal process valid in this State acquired a lien upon those assets, that lien has been sustained. The general principle of law is not disputed. Nor can it be disputed that, so far as the title of Betts as receiver depends upon his .appointment by the Connecticut court, that appointment by itself carries with it no force to deprive domestic creditors of their right to pursue the assets in this State as though no receiver had been appointed. (Hibernia National Bank v. Lacombe, 84 N. Y. 367 ; Gluck & B. Rec. Corp. [2d ed.] 34, and note, § 52.)
The appellant can claim, therefore, only under the order appointing him ancillary receiver in this State. His claim is that, as the corporation had been dissolved in the State of Connecticut, it ceased to exist, so that no action could be brought against it in this State after the entry of the decree of dissolution in Connecticut, and, therefore, the plaintiff's proceedings against the defunct corporation are coram nonjudice and void. But that question can only be raised by some person in this State who occupies a position which would entitle hint to claim the assets' and to complain that, because of the judgment and the attachment, his rights have been interfered with. It appears by the record that the action in which the appellant was appointed an ancillary receiver was begun oh the 28th of July, 1899,. and that the sole defendant was the National Life Association. All the appellant's rights, then, come into existence by virtue of his appointment as receiver in an action which was begun after the corporation had been dissolved by the Connecticut decree. If the corporation was dead on the 7th of July, 1899, so that no action Could be brought against it in this State' by the creditor on the 15th of July, 1899, it is difficult to see why it was not also dead on the-twenty-eighth of July, and how the court had any more jurisdiction to appoint an ancillary receiver of the corporation in one action than to issue a warrant of attachment in another. For this reason the appellant is not aggrieved by the denial of his motion, because? he has shown no title to the property of the corporation in this-State and, therefore, he has no right to ask for the reversal of this-"order.
We are not satisfied that the effect of this judgment of the Connecticut court was to finally and conclusively kill the corporation so-far as our jurisdiction is concerned or to take away the remedies of creditors in this State. The company had obtained the right to do-business in this State ; it had deposited a sum of money as required by the laws of this State with the Superintendent of the Insurance?. Department, and it appears that it had assets in this State which were subject to levy and which had been levied upon in' the plaintiff's action ; and it further appears that it was engaged in business-up to the time when the. court undertook to appoint the ancillary receiver. Certainly whatever may be the legal fiction as to' the-existence of the corporation after the entry of the Connecticut decree, it is quite clear that that judgment did not at that instant operate to deprive the corporation of its property in this State, or-to vest it in any other person as against a creditor here.
Not only the property rights of the defendant but those of its-creditors necessarily required that the corporation should not be dissolved in this State until some one was put in its place who could protect the rights of the corporation and against whom proceedings-might be taken. Interstate comity does not require us to hold that., the necessary effect of the Connecticut decree was, absolutely and at. once, to put an end to the rights of the corporation in this State until that- decree had been presented to the courts of this State and some-judgment- had been-entered'upon it under such circumstances as to-give some one here the right to enforce it. If we should hold that -the corporation is dead in-this State the moment the decree is-entered in Connecticut, it results that there is no one in this State who could sue in the name of the corporation or against whom an action can be. brought; and so the consequence .would be that. although the corporation might have by far the larger portion of its assets in this State,' the courts would be powerless to protect ' those assets for our own creditors. There is no rule of law requiring such an effect to be given to the judgment of a foreign State. When the judgment of dissolution has been brought to the attention of our courts and steps are taken to enforce it here, all that we are required to do is to give it the same force and effect that it would have in the foreign State. But until that time, the status of the corporation is not changed in this State and the remedies of our own citizens áre not taken away. It was said by Judge Finch in the case of Rodgers v. Insurance Co. (148 N. Y. 34, 38) "that the foreign corporation dissolved and dead in the domicile of its origin should be deemed alive in the foreign state so far as to save the remedies of its own citizens against property within its own jurisdiction, is entirely possible and not at all unreasonable." We might go farther and say that to consider a foreign corporation, dissolved and dead in the domicile of its origin, so far alive in this State as to permit an action to be brought' against it, is exceedingly reasonable and quite within the rules of good sense and not forbidden by any rule of positive law. For this reason, also, we. think that the order of the court below was correct and should be affirmed, with ten dollars costs and disbursements.
Van Brunt, P. J., Patterson" and O'Brien, JJ., concurred;. Ingraham, J., dissented.