Court Opinion

ID: 5181454
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:42:43.599352+00
Date Added: 2024-06-11T08:26:35.135103
License: Public Domain

Landon, J. (dissenting):
Chapter 376, Laws of 1885, provides: “ Where a receiver of a corporation created or organized under the laws of this State and doing business therein, other than insurance and moneyed corporations, shall be appointed, the wages of the employees, operatives and laborers thereof shall be preferred to every other debt or claim against such corporation, and shall be paid by the receiver from the moneys of such corporation which shall first come to his hands.” .
The statute was in force when the mortgage was given, and, therefore, the mortgage was subject to the rule therein expressed, unless the receiver in the case of a mortgage foreclosure of a corporation’s property is not the receiver of a corporation. (Met. Trust Co. v. Tonawanda V. & C. R. R. Co., 103 N. Y. 245.) The case of The U. S. Trust Co. v. N. Y., West Shore & B. R. Co. (101 N. Y. 478) is cited as holding that the receiver in mortgage foreclosure is not the receiver of a corporation. What was there held was that the receiver in a mortgage foreclosure was not the receiver of a corporation within chapter 378, Laws of 1883. The court said that that was an act to prevent abuses' in winding up insolvent corporations. Chapter 376, Laws of 1885, was passed to prevent the abuse of leaving the wages of the employees, operatives and laborers unpaid, an abuse more easily practiced in a mortgage foreclosure than in winding up the corporate business.
*259The courts of this State were not inclined to follow in this respect the more liberal practice of the Federal courts. (See Raht v. Attrill, 106 N. Y. 423, 436.) We should give effect to the plain mandate of the Legislature.
It was the duty of the receiver, therefore, to pay these laborers <l from the moneys of such corporation which shall first come to his hands.”
We think the order appealed from, so far as it refuses payment of the wages due the employees, operatives or laborers, should be reversed, with costs, and that the receiver be directed to pay such claims, and that to that end he be at liberty to apply to the court for such orders, and to take such further proceedings as will enable him to do so, as he may be advised.
The order to be settled by a justice of this court.
Order confirming referee’s report and discharging the receiver and his sureties from all matters relating to his receivership affirmed, with ten dollars costs and disbursements; and the appeal from the order directing the payment to the mortgagee of so much of the purchase money as was still in the custody of the court dismissed, with ten dollars costs.