Court Opinion

ID: 5181923
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:43:20.105272+00
Date Added: 2024-06-11T08:26:36.047916
License: Public Domain

O’Brien, J. (dissenting):
Without determining the question whether the abatement of the-. voluntary proceedings could be- raised on the motion resulting in the order appealed from, or whether the Attorney-General is in such á sense ¡a party to the proceeding that he has the right to-*327appeal, I think, in view of the interests affected, that the merits should be disposed ■ of. It has been decided by this Appellate Division that the voluntary proceedings were properly instituted, and that the court had jurisdiction to entertain them and to appoint receivers. This decision was followed by the Appellate Division in the second department, and an order appointing different receivers in the People’s suit was reversed. The effect, therefore, of this decision was to vest the title and the right of possession of all the assets of the bank in the receivers appointed in the voluntary proceeding in the first department; and though they were but temporary receivers, they could take possession of the assets, and compel others who had property of the corporation to deliver it over to them, or maintain an action for its recovery.
It is insisted, however, that the effect of the judgment of dissolution in the People’s action was to abate the voluntary proceedings and to strip the receivers of all power except to hold such assets as they then had. But this judgment as modified is expressly limited to providing for the dissolution of the bank, and it is therein declared “ that no receivers of the said corporation or of the property thereof (shall) be appointed in or by this judgment.” - Recognizing the possibility that the voluntary proceedings pending in this district might be discontinued or dismissed upon the final hearing, the judgment further directed that, in that event, the Attorney-General might apply at the foot of the judgment for the appointment of permanent receivers. In the People’s action, as in the voluntary proceeding, the purpose sought was double relief. First, a dissolution of the corporation ; and, second, a distribution of its assets. In the judgment of dissolution, as we have seen, the court, having notice, and ju'ior to that time having held, that the same court in this district had first acquired jurisdiction in the voluntary proceeding over the assets, and was engaged in administering upon them, left to the receivers therein appointed the possession and the right of distribution of the assets, whilst according the other relief by dissolving the corporation.
I think the rule with respect to the abatement of all actions and proceedings against a dissolved corporation is subject to the limitation that, even as against such corporation, a pending action may proceed, providing the order or judgment of dissolution itself pre*328serves it from abatement. And from the form of the judgment as modified by the Appellate Division in the second department, and the language of the opinion of that court, it clearly appears that, so far as it was within the power of the court to do so, it intended to preserve the voluntary proceedings from abatement, notwithstanding the dissolution of the corporation, leaving it to the receivers whose appointment they had held valid to distribute the assets.
The question, therefore, remains as to whether, under section 1793 of the Code, the court in the People’s action was obliged to provide for distribution by appointing receivers. That question was before the Appellate Division and was directly passed upon, as shown by the opinion and by the form of the judgment; and I agree with the construction given to the section, viz., that the word “ must ” as employed in the section of the Code is not imperative, but, as applicable to the facts here, must-be construed as directory. What undoubtedly was meant by the provision of the Code is, that distribution had to be • made, and in such manner .as the court thought proper. And the court having already in mind that the assets had been taken possession of by its receivers in another proceeding, all - that was necessary to be done was to dissolve the coiv poration and leave to such receivers the- distribution. I think, therefore, as the assets were already sequestered for distribution in another proceeding, that it was entirely proper to refuse to insert an additional provision for distribution in the judgment in the People’s action, it appearing that the court that made the judgment was already administering the fund in such other proceeding. What the Code requires is- that, after dissolution, the q>rop>erty of the corporation shall be distributed among its creditors; but it can make no difference whether that takes place in one proceeding or another, especially where both proceedings are in the same court. Ror does the section referred to enact that the final judgment in the action brought against the corporation shall provide for the distribution of the property in that action.
The effect of reversing the order appealed from here is to permit that to he done which has been expressly disapproved of by the Ap>p>ellate Division in both the first and second, departments, and in a collateral way to construe- the judgment of dissolution — which has already been construed by the court that made it— contrary to *329the intent and purpose of that court. The delay, uncertainty and expense to depositors that will result from retracing the steps already taken, and substituting new receivers for those already appointed and acting, should be avoided, and, I think, this can be done consonant both with reason and authority; but even if it be assumed that these proceedings abated, then, for the reasons given by. Mr. Justice Ingraham, in which I concur, I think the order appealed from should be affirmed.