Case Name: In the Matter of the Application of George H. Stonebridge, Jr., Rec'r
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1890-07-18
Citations: 32 N.Y. St. Rep. 1070
Docket Number: 
Parties: In the Matter of the Application of George H. Stonebridge, Jr., Rec’r.
Judges: 
Reporter: New York State Reporter
Volume: 32
Pages: 1070–1078

Head Matter:
In the Matter of the Application of George H. Stonebridge, Jr., Rec’r.
(Supreme Court, General Term, First Department
Filed July 18, 1890.)
1. Corporations — Insolvent—Examination op debtor.
Notice of the application for a warrant for the examination of a debtor of an insolvent corporation must be given to the attorney-general. (Per Bartlett, J.)
2. tiAME — Notice of appointment of receiver.
Before the receiver of an insolvent corporation can make application for such a warrant he must put the debtor in default by a publication of a proper notice of his appointment as such receiver. (Per Van Brunt, P. J.)
8. Same.
A notice not signed by the receiver, and which does not contain his name or state to whom the property is to he delivered, is not a proper one, and does not put the debtor in default, and such defect is not obviated by a personal demand by the receiver. (Per Van Brunt, P. J.)
(Barrett, J., dissents.)
Appeal from an order of the special term denying a motion to vacate a warrant for the apprehension and examination of John B. Alden.
James B. Dill, for app’lt; Ghas. M Hughes, for receiver, resp’t.

Opinion:
Bartlett, J.
The warrant against the appellant was issued at the instance of George H. Stonebridge, Jr., receiver of the New York Book Company, assuming to act under certain provisions of the Revised Statutes relating to trustees of insolvent debtors, which provisions are by law made applicable to receivers of •corporations. 4 Rev. Stat., Bank's 8th ed., pp. 2524-2534, and p. 2682, § 72. No notice of the application for the warrant was given to the attorney-general. This is the first point made in the brief of the appellant, and it is fatal. The precise question has been determined by the court of appeals, in a case where'an application was made to me for a warrant of this kind, at the Kings county special term, in November, 1889.
The application was denied on the sole ground that no notice thereof had been given to the attorney-general as prescribed by the Haggerty act. Laws of 1883, chap. 378. The order refusing the warrant was affirmed by the general term, on this and other grounds; and was sustained in the court of appeals on the ground alone that the attorney-general should have had notice of the application, without considering the other questions discussed by the general term. In re Van Namee, 23 N. E. Rep., 1149; 29 N. Y. State Rep., 198.
The decision mentioned.is conclusive against the position of the respondent, and renders it necessary to reverse the order appealed from, without discussing the other interesting points presented by the appeal.
Van Brunt, P. J.
The respondent in this action on the 12th of February, 1889, was appointed receiver of the New York Book 'Company in proceedings taken to procure the sequestration of the property of said corporation for the purpose of paying the debts thereof. The said receiver qualified and published a notice requiring all persons indebted to the said corporation or having the property of said corporation in their possession to pay such debts or sums of money or to deliver the same to him at his office. This" notice was not signed by the receiver nor did it contain the name •of the receiver in any part thereof, and it was impossible to determine from the notice who had issued the same.
It being claimed upon the part of the receiver that the appellant Alden had certain property of the corporation in question in his possession, an application setting up these facts was made to the court for a warrant against the said appellant that he might be brought before the court for the purpose of being examined pursuant to the statute in such case made and provided.
This warrant was granted, and a motion having been made to¡ set the same aside upon various grounds, that motion was denied,, and from the order denying the same this appeal is taken.
In the foregoing statement of facts it has not been deemed necessary to state all the proceedings which have been taken in reference to the appointment of the receiver, nor to make any particular reference to the papers upon which the warrant in question was granted, except so far as it sets forth the point upon which this appeal may be determined.
By the provisions of the Revised Statutes, under which the proceedings in question were initiated, § 70, 2 R. S., 469, it is provided that the receivers immediately on their appointment, shall give notice thereof, which shall contain the same matters required by law in notices of trustees of insolvent debtors. By § 72, it is provided that after the first publication of the notice of the appointment of receivers, every person having possession of any property belonging to such corporation, and every person indebted to such corporation, shall account and answer for the amount of such debt and the value of such property to the said receivers. The section further provides that all the provisions of law in respect to trustees of insolvent debtors, the collection and preservation of the property of said debtor, the concealment and discovery thereof, and the enforcement of such discovery, shall be applicable to the receivers so apppointed and to the property of such corporation.
It will be seen by the provisions of this section that it is not until after the first publication of the notice of the appointment of the receiver, as provided by § 70, that it becomes obligatory upon the person indebted to the corporation to account and answer for the amount of such debt and the value of such property to the receiver.
In the case at bar, although an attempt to publish the notice' required by § 70 is made, yet it contains no notice as to who has been appointed receiver nor to whom the property is to be delivered. Therefore the obligation created by § 72 did not spring into existence, as it is only after the publication of the notice of the appointment of the receiver, as already stated, that the duty to. account and answer for debts due to the corporation and property belonging to the corporation arises.
It is urged upon the part of the respondent that the publication of the statutory notice to creditors and debtors of the corporation was not a condition precedent to the receiver's application for the warrant, because personal demand had been made upon Alden for the delivery of the property of the company before the application was made. It may be said in answer to these suggestions that where the statute provides one proceeding for putting a party in default,, provides for a particular way of giving a notice, a notice given in another way, although equally effectual, cannot establish such default. As already seen, the language of § 72 is explicit, after the-first publication of the notice of the appointment of the receiver, then the duty to deliver the property shall arise, and there is no provision whatever that it shall arise before.
It is true that § 12, 2 R S., 43, relating to the powers, duties and obligations of trustees and assignees, provides that whenever the trustees shall show by their own oath or other competent proof that there is good reason to believe that the debtor, his wife, or any other person, has concealed or embezzled any part of the estate of such debtor vested in said trustees, or that any person can testify concerning the concealment and embezzlement thereof, a warrant may be issued commanding the sheriff to cause such person to be brought before the court for the purpose of being examined.
But this provision is to be read in connection with the provisions of § 72, upon which it is engrafted by the. latter part of this section. It certainly was not intended that before the dutj of delivering over the debts and property of the company by reason of the publication of the notice, this provision in regard to examination should go into effect, because, under that very provision of the statute, until that notice was given the alleged debtor was not in default.
We think, therefore, that the necessary preliminary to the initiation of these proceedings was the putting of the debtor in default by the publication of the proper notice of the appointment of the receiver in order that the debtor might deliver over the property.
It appears clearly from the record in this case that no such notice was given. The appellant was not put in default by the demand because that was not the method provided by the statute for putting him in default, and not being in default in respect to delivery of this property, it is difficult to see how the court was justified in issuing the warrant for his examination.
The other points raised upon this appeal it does not appear to be necessary to consider, as the one suggested seems to be fatal.
The order should be reversed, with ten dollars costs and disbursements.