In re Christian Jensen Co.

• Decision Date: 31 October 1891
• Parties: MATTER OF CHRISTIAN JENSEN COMPANY.
• Court: New York Supreme Court

128 N.Y. 550

28 N.E. 665

MATTER OF CHRISTIAN JENSEN COMPANY.

Supreme Court, New York County, New York.

October, 1891.

Appeal from an order of the General Term of the Superior Court of New York affirming an order of the special term, enjoining, on motion of the receiver of the Christian Jensen Company, Limited, appointed in proceedings for the voluntary dissolution of the corporation, further proceedings in certain actions brought by Charles F. Wahlig and others against the company; and directing that the corporate property replevied or levied in attachment after the receiver's appointment be surrendered to him.

The material portions of the order to show cause why the company should not be dissolved and appointing the receiver, was as follows:

“In the matter of the application of the directors of the Christian Jensen Company, Limited, for a voluntary dissolution.”

On reading and filing the petition, etc., “It is ordered that all persons interested in said corporation show cause before this court at the court house in the city of New York, on June 11, 1891, at 10.30 o'clock in the forenoon of said day or as soon thereafter as counsel can be heard, why the prayer of the petition should not be granted.”

“It is further ordered, that whereas it appears to the satisfaction of the court that the said Christian Jensen Company, Limited, is insolvent; now therefore on further motion,” etc.

“Ordered that Isidor Grayhead, Esq., of the city of New York, be and he hereby is appointed temporary receiver of all the property and assets of the said Christian Jensen Company, Limited,” etc.

This order was made on March 10. On March 11, Charles F. Wahlig and others commenced two actions against the company and attached and replevied property in the company's possession. On the 12th the above order was served on the persons bringing the actions, but no copy of the petition upon which it was granted was served with it. On the same day the order was amended without notice, nunc pro tunc, so as to make it literally comply with Code Civ. Pro. § 2423, by directing persons interested to show cause, etc., “why the said corporation should not be dissolved,” instead of the direction in the original order “why the prayer of the petition should not be granted;” and also to contain a direction for the publication of the order as required by Code Civ. Pro. § 2424, which the original order had entirely omitted to provide for.

MCADAM, J., on granting at special term the order appealed from, rendered an opinion holding that the order to show cause “why the prayer of the petition should not be granted,” was a substantial compliance with Code Civ. Pro. § 2423, as the order was entitled in the proceedings which expressed its purpose and referred to a petition on file (Citing 1 Abbott's New Pr. & F. 668; dist'g In re Pyrolusite Co., 29 Hun, 429; s. c., 3 Civ. Pro. R., 270, on the ground that there the petition was defective).

Although the order of the court was sufficient without amendment the court had power to amend it in furtherance of justice. The receiver's title related back to the time when the original order was signed, and therefore motion for injunction and delivering up of the property to the receiver should be granted as to all proceedings instituted after the receiver's appointment.

On appeal the general term affirmed the order upon the opinion of the special term. An appeal was taken to this court.

John Fennel, for appellants.

I. The proceeding is statutory and unless the statute is fully complied with there is no jurisdiction (Citing In re Pyrolusite Manganese Co., 3 Civ. Pro. R. 270; s. c., 29 Hun, 429; Bloom v. Burdick, 1 Hill, 130; Chamberlain v. Rochester S. P. V. Co., 7 Hun, 558; Matter of Dubois, 15 How. Pr. 7;In re Valentine, 72 N. Y. 184;Stillwell v. Swartout, 81 Id., 109; Brown v. Mayor, etc., 3 Hun, 686; People ex rel. Gambling v. Board of Police, 6 Abb. Pr. 164;Sibley v. Waffle, 16 N. Y. 190;Bangs v. McIntosh, 23 Barb. 599).

II. Where there is a failure to comply with the statute it is fatal to a proceeding in a superior court as to a proceeding in an inferior court (Citing Bloom v. Burdick, 1 Hill, 139; Chamberlain v. Rochester, etc. Co., 7 Hun, 557; Bangs v. McIntosh, 23 Barb., 598).

III. There was no jurisdiction to amend the order (Citing Comin v. Merritt, 3 Barb. 346; In re Valentine, 72 N. Y. 84;Battel v. Torrey, 65 Id. 295;People v. Hulburt, 46 Id. 110;Stillwell v. Swartout, 81 Id. 109;Bangs v. McIntosh, 23 Barb., 601.)

IV. The title of the receiver was not vested until he filed his bond.

V. The court had no power to order the goods taken in replevin to be delivered to the receiver (Citing German Savings Bank v. Habel, 80 N. Y. 273).

John C. Coleman, for respondent.

EARL, J.

On March 10, 1891, the directors of the Christian Jensen Company Limited presented a petition to the superior court of the city of New York praying for a voluntary dissolution of the corporation. As the petition is not contained in the record, we must assume that it was proper in form and substance. In fact, no objection is made that it did not comply with the provisions of the Code relating to the voluntary dissolution of corporations (secs. 2419, et. seq.).

Upon the presentation of the petition, the court made an order appointing Isidor Grayhead temporary receiver of all the property and assets of the corporation, as authorized by section 2423 of the Code, which also provided “that all persons or persons whomsoever, whether creditors of the said Jensen Company (Limited) or otherwise, are hereby enjoined and restrained from bringing or continuing any action against the said corporation for the recovery of any moneys due said creditors, and until further order of this court in the premises.” The next day the receiver filed his bond and became qualified to act; and he took actual possession of the property of the corporation on March 12. The order of March 10 was served on the appellants who composed the firm of Charles F. Wahlig's Sons, on March 12, but no copy of the petition was served with the order. On March 12, the attorney for the petitioners, without notice to the appellants, made a motion that the order of March 10 be amended nunc pro tunc in certain particulars, and that motion was granted. On March 11, the appellants commenced an action in one of the district courts in the city of New York against the corporation, and in that action a writ of replevin was issued to one of the city marshals, who, on the same day, replevied from the corporation certain property in its possession, and on the same day they commenced an action in the court of common pleas to recover a money judgment, and in that action a warrant of attachment was issued to the sheriff of the city and county of New York, and on the same day he attached certain property of the corporation.

Thereafter the receiver made a motion at a special term of the superior court to restrain the prosecution of the suits thus commenced by the appellants, and after hearing counsel for the parties the court made an order granting the motion, and permanently restraining the appellants from taking any further proceedings...