Court Opinion

ID: 9336016
Source: CourtListenerOpinion
Date Created: 2022-12-15 21:50:01.877809+00
Date Added: 2024-06-11T17:15:11.479332
License: Public Domain

MAYER, Circuit Judge
(after stating the facts as above).  So far as affects the appellants, Huddleston Company is an existing corporation, just as if no merger had taken place. This proposition we think is disposed of by two decisions of the New York Court of Appeals. Irvine v. New York Edison Co., 207 N. Y. 425, 101 N. E. 358, Ann. Cas. 1914C, 441; Syracuse Lighting Co. v. Maryland Casualty Co., 226 N. Y. 25, 122 N. E. 723. Since these decisions of the New York Court of Appeals, the New York Legislature has amended the whole of chapter 59 of the Consolidated Laws; but, legislating as it did with knowledge of these decisions, it has not in any way changed them, except further to protect creditors by making the possessor corporation liable for the debts of the merged corporation. Laws N. Y. 1923, c. 787. Smith v. Pacific Improvement Co., 104 Misc. 481, 172 N. Y. Supp. 65; People ex rel. Huff v. Warden, etc., 118 Misc. 681, 684, 194 N. Y. Supp. 862. We see nothing in Matter of Bergdorf, 206 N. Y. 309, 99 N. E. 714, which calls for a different construction of the statute as affecting the facts in the case at bar than that indicated by the two cases first cited supra.
The argument is urged that, because the receivers have taken possession of the real property which belonged to Huddleston Company and is now a part of the plant of Astoria Mahogany Company, which the receivers are operating, therefore there is no right to permit petitioners to have execution issued upon their judgment against this property. This argument overlooks the proposition, first, that no receivers have been apjpointed for Huddleston Company and presumably none could be appointed; and, secondly, that the property of Huddleston Company is still separate and apart for all the purposes of section 15, supra, in favor of creditors of Huddleston Company. In short, the situation is precisely the same as if the property of Huddleston Company were in the possession of a going concern. In such circumstances, first come, first served, and the vigilant creditor gains with propriety an advantage over him who follows because less vigilant. There is no question here of marshaling the assets of Huddleston Company as between its creditors.
Neither the District Court nor its receivers has possession of the property of Huddleston Company against those who were creditors prior to the merger. In view of the foregoing, the court erred in refusing permission to the petitioners to issue execution as prayed for.
The decree is reversed, and the District Court is instructed to enter its decree granting the application of appellants, with costs on this appeal.