Court Opinion

ID: 5234358
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:05:20.953023+00
Date Added: 2024-06-11T08:27:42.647841
License: Public Domain

Hotchkiss, J. (dissenting):
The claim of the appellant is that Huffman, the subcontractor in whose favor the claim originally arose, and who *590was the assignor of the Model Company, appellant’s predecessor in interest, was at the time the debt was contracted, a citizen of Virginia and, as such, under the laws of that State, was entitled to a lien on the securities in the hands of the Virginia commissioner; and that appellant became subrogated to Huffman’s rights with respect to such securities. It is doubtless true that by filing its claim with Superintendent Emmet, appellant subjected itself to the jurisdiction of this court and that, as an incident to such jurisdiction, the court was invested with power to make such orders as were necessary for the protection of the assets amenable to the proceedings pending before it, and in that behalf to direct and control the appellant with respect to its claim as filed. But by the mere act of filing its claim, appellant did not release any security it may have had therefor, or the right to enforce the same. (People v. Remington, 121 N. Y. 328; Matter of Binghamton General Electric Co., 143 id. 261.) Securities deposited under circumstances similar to those under which the securities held by the Virginia commissioner were deposited, have been held to constitute a separate fund, to be administered for the benefit of those in whose behalf the fund was created. (See People v. Granite State Provident Assn., 41 App. Div. 257; affd., 161 N. Y. 492.) The fund in question was not under the jurisdiction of this court, nor could this court control its distribution. It was held by the State of Virginia, which was undertaking its distribution in a special proceeding to which all persons having claims against the fund were invited to become parties. It would in no way have inured to the advantage of the general assets of the surety company had the appellant refrained from filing its claim. Such action on its part would only have increased the pro rata distribution of those who did file claims. The securities constituting the Virginia fund had passed out of the possession of the surety company and were not under its control, and the respondent had no interest in the fund as such. He was at most entitled to contest the right of the Virginia authorities to distribute the same, or the right of the appellant or other claimants under the Virginia law to participate in such distribution, always providing that the respondent should be admitted by *591the Virginia courts to intervene in the proceedings there pending. By filing its claim, appellant did not interfere with or embarrass any such right on respondent’s part. Nor, had respondent not so intervened, would a determination in those proceedings that appellant was entitled to participate in the fund have had the effect, as against the respondent, of an adjudication as to appellant’s status as a creditor so far as any New York assets or any general assets of the surety company were concerned. The situation was then entirely different from what it would have been had defendant attempted to subject the general assets of the surety company in a foreign jurisdiction either to a general or to a special claim on appellant’s part. It is not claimed that on this appeal appellant can raise any question concerning the validity of the injunction order, but we may properly inquire whether the injunction, when fairly construed, extended to any such situation as that disclosed by this record; and that question, as a question of law, I think must be answered in. appellant’s favor. But if I am wrong in this, and assuming the question to be one of fact, the situation was at least one of such doubt that, under the circumstances disclosed,, no willfulness or contumacy being disclosed, the order appealed from was unwarranted.
Order modified as stated in opinion, and as modified affirmed, without costs.