Court Opinion

ID: 6126048
Source: CourtListenerOpinion
Date Created: 2022-02-04 20:29:09.536571+00
Date Added: 2024-06-11T08:28:22.416676
License: Public Domain

Navis, P. J.:
I concur fully, in the conclusion of my brother Daniels on the grounds stated by him. I think also that the other questions in the case ought to be considered. The receiver appointed in the action was removed without notice to the plaintiff, or indeed to any party in the suit. The order to show cause why the receiver should not be removed was only directed to be served on the receiver himself. It was served upon neither the plaintiff nor the defendant, nor did either of them appear on the hearing. No notice of application for the appointment of a new receiver was given to the plaintiff, or to the defendant corporation. The motion was made under the act of 1880, and was of necessity a motion in the pending action. It was in no sense an original proceeding. It was the duty of the moving party to have given notice to the plaintiff, and no order binding upon him could be made without such notice or without his appearing on the motion and expressly or by necessary inference waiving such notice. This irregularity was too gross to be disregarded. The plaintiff, who is now appellant, had the fullest interest in the receivership. He was entitled to be heard upon any question affecting it. He was especially interested in the question who should be appointed receiver if the existing one should be removed. No action taken without notice to him, or a hearing on his behalf can be upheld. This principle is so elementary and so controlling in all cases that no authority need be cited. In this case it was wholly disregarded. The irregularity was therefore fatal to the order so far as it affects or can affect the plaintiff or his rights. And the motion to set it aside as to him was properly made at the Special Term in this district, which is the place of trial of the action. It should have been granted by the court below. If the plaintiff had a right of appeal from the order, which is certainly questionable, he yet had a clear right to move at Special Term to set aside an order void as against him for such ail irregularity.
The order made by the Special Term in the third district was, as already suggested, one in an action the place of trial of which is in the city and county of New York. The justice ordered it to be entered in Albany county. This was a violation of the rules of the eotírt, but it did not affect the validity of the order because the irregularity could be corrected by another order directing the entry *384in the proper county. It was introducing a method' of practice greatly inconvenient and embarrassing to the administration of justice. In effect it divided the pending action in which the receiver had been appointed into two parts, to be run concurrently in different districts and before different justices or courts. The one having the action and its merits in hand -which, of course, involve the question whether there should have been any receiver appointed, and the other taking charge of the management of the receiver and the incidental orders affecting his proceedings, and the disposition of funds in his hands. Such a division of actions and dispersion of papers in the same action ought not to be tolerated. It is sure to lead to controversies and, perhaps, to abuses discreditable to the administration of justice. Motions will be made, conflicting in their nature, touching the disposition of funds or the conduct of the receiver in the different districts, resulting in conflicts injurious to the rights of parties and unhappy in all their aspects. It is very clear that the act of 1880 contemplates nothing of the kind; nor was it intended that a motion in the third district made by the attorney-general under that act, in a suit pending in a distant portion of the State, should operate to transfer the control of any new receivership that might be created, from the courts where the action was pending, and confer it on a court of justice in a distant portion of the State.
The abuses to be corrected by the interposition of the attorney-general would, in many cases, be slight compared with those which might grow out of the concentration in one district of the control, patronage, allowances, accountings and discharging of receivers, to say nothing of the expense and embarrassment of distant parties, counsel, witnesses, and receivers in attending before courts distant from their places of residence. It is to be regretted, in view of the case made against Receiver Rice, which seems to call for his removal, that these questions should have arisen. But they are before us in the case, and must be disposed of in conformity to established rules of law and practice affecting not only this but all other cases of like nature, and thev demand a reversal of the order in so far as it affects the appellant.
Brady, J., concurred.
Order reversed.