Court Opinion

ID: 3616378
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:59:23.190422+00
Date Added: 2024-06-11T14:24:50.256160
License: Public Domain

I agree with Judge FINCH'S conclusion that section 29 of the General Corporation Law was inoperative in this situation. I disagree with his conclusion as to the legal effect of the admitted activities of the Superintendent of Insurance in connection with the South Carolina receivership. The Superintendent had an interest in any surplus that might remain of the company's assets in South Carolina after local claims were satisfied, and the Superintendent quite properly took steps to investigate and protect that interest. On the proof before the referee a question of fact arose as to whether those steps were of such nature as to have made the Superintendent a party litigant in the South Carolina proceedings and so bound by the judgment which ended those proceedings. As showing such a dispute of fact we need only point to the evidence before the referee that the Superintendent instructed the attorney for the South Carolina receivers to defend any unfounded claims, promised to pay that attorney for his services, requested and obtained from the Special Master a postponement of the hearings in South Carolina, sent a representative to South Carolina to confer with the Special Master concerning these claims, received from the Special Master a report on the allowance of claims, and asked for and received an opportunity to object to any of the claims. Such proof, I think, was ample to support a finding of fact in this proceeding that the Superintendent had become an active litigant in the South Carolina receivership. The referee, who was appointed in this proceeding to hear and report only, did not make such a finding but found to the contrary. His report was confirmed by Special Term without opinion, and the Special Term order was affirmed by the Appellate Division, again without *Page 225 
opinion. In this situation, as the case comes to us, we are in no way bound by the finding of the referee that the Superintendent of Insurance was not an active litigant in the South Carolina proceedings. Findings by such a referee are "merely to inform the conscience of the court" (Marshall v. Meech, 51 N.Y. 140,148) and so the validity of the Special Term's order of confirmation does not depend on the findings of the referee. Rather we are required to assume that Special Term made for itself such findings of fact as are necessary to support the order. (Trustees of Amherst College v. Ritch, 151 N.Y. 282,321; Britton v. Scognamillo, 238 N.Y. 375, 377.) This seems to be the rule whether Special Term confirms the referee's report as here, or disaffirms it, as in Marshall v. Meech (supra). (See Bannon v. Bannon, 270 N.Y. 484, 492.) Required as we are to assume that Special Term found as fact that the Superintendent of Insurance did place himself in the role of a litigant in South Carolina, and discovering, as we do, ample testimony to support such a finding, we must conclude that the result reached below was correct.
LOUGHRAN, LEWIS and CONWAY, JJ., concur with FINCH, J.; DESMOND, J., dissents in opinion in which LEHMAN, Ch. J., and RIPPEY, J., concur.
Orders reversed, etc. *Page 226