Court Opinion

ID: 5548491
Source: CourtListenerOpinion
Date Created: 2022-01-10 21:23:25.689455+00
Date Added: 2024-06-11T08:34:59.555597
License: Public Domain

The Chancellor.
The solicitor for the appellants mistook the practice of the court, in supposing that it was proper to file exceptions to the master’s report of his appointment of the receivers. Where it is referred to a master to report a proper person to be appointed a receiver of the property of a defendant, or of a corporation, or the committee of an idiot or a lunatic, and to approve of sureties to be given by such receiver or committee, the appointment is not complete until it is confirmed by the special order of the court. But where the master is directed to appoint a receiver, and to take from him the requisite security, no order for the confirmation of the appointment is necessary. (Bowersbank v. Collasseau, 3 Ves. 164.) In such cases the master, after approving of the receiver and of the sureties to be given by him, takes the requisite bond and files it with his report of the appointment, stating that he has approved of the bond, and that is duly filed. And upon filing such report, the appointment of the receiver is complete, and he may immediately enter upon the duties of his office. (1 Smith’s Ch. Prac. 490. 1 Grant’s Ch. Prac. 264. 2 Brown’s Ch. Prac. 838. Edwards on Receiv. 80.) If either party is dissatisfied with the appointment made by the master, the proper course is to present a petition to the court, upon due notice to all the other parties who have appeared and who are interested in the appointment, stating the grounds of objection to the receiver, and praying that the master may review his report. (1 Smith’s Ch. Prac. 491. Edwards on Receiv. 81.) As the vice chancellor, however, appears to have affirmed the decision of the master without reference to the form in which the question was brought before him for his decision, *387I shall proceed to examine the case upon its merits ; for the purpose of seeing whether there was such manifest error in the appointment made by the master, as to render it proper to direct the master to review his report.
The court will not disturb the decision of the master, appointing a receiver, merely because it may think he might have made a better selection among the several candidates proposed. To induce the court to interfere, the applicants must either show that the person appointed by the master is legally disqualified, or that his situation is such as to induce a belief that the interests of the parties will not be properly attended to by him. (Wynne v. Lord Newborough, 15 Ves. 383.) In the present case, although the corporation is insolvent, the creditors are not the only persons interested in the appointment of the receiver. It appears by the petition for the dissolution, that the company was organized under the general act of March, 1811, authorizing incorporations for manufacturing purposes. The seventh section of that act makes those who were stockholders at the time of the dissolution of the company individually liable for the debts of the corporation, to the extent of their stock, if the funds of the company should not be sufficient for the payment of its debts. Those stockholders, therefore, have a deep interest in having the concerns of the company closed up in such a manner as to relieve them from individual responsibility. And as the statute relative to voluntary dissolutions has authorized the appointment of officers or stockholders of the corporation, as well as other persons, as receivers, if they are not otherwise disqualified, I see no valid objection to the appointment of the president and book keeper to be the receivers in the present case.
I have not been able to find any thing in the papers before the vice chancellor showing that the insolvency of the company was occasioned by the fraud or mismanagement of either of these officers; or that either of them had assigned any of the property, under circumstances which would render it necessary or proper for the receiver to in*388stitute proceedings against these officers personally to recover back the value of the property. The judgments confessed by the attorney of the corporation being absolutely void as against the receivers, there is no difficulty in their instituting proceedings, against those creditors who have taken the property and caused it to be illegally sold, to recover hack the value of the property. The principle adopted in the case of The Attorney General v. The Bank of Columbia, (3 Paige’s Rep. 511,) might have been proper to be applied to this case if the proceedings had been instituted under the previous article of the revised statutes, as an adversary proceeding against the company and its officers. But it is not applicable to this proceeding, under the article relative to voluntary dissolutions, where the legislature has in express terms authorized the officers of the corparation to be appointed receivers.
The decision of the vice chancellor must therefore be affirmed, with costs.