People v. Knickerbocker Life Ins. Co.
| Decision Date | 04 October 1887 |
| Citation | 13 N.E. 447,106 N.Y. 619 |
| Parties | PEOPLE v. KNICKERBOCKER LIFE INS. CO. (Claim of PENDLETON and others.) |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from general term, supreme court, First department.
This was an appeal by the receiver of the defendant from an order of the general term, reversing an order of the special term, confirming the report of the referee, which disallowed the claim of these respondents.
Leslie W. Russell, for appellant.
A. Walker Otis, for respondents.
The Knickerbocker Life Insurance Company was dissolved in December, 1882, by a decree of the supreme court of this state, and the appellant appointed receiver of its property. Prior to that time, a judgment had been rendered against the company by the circuit court of the United States for the Western district of Tennessee in favor of Pleasant H. Pendleton and others, upon a policy of insurance theretofore issued by it. The company sued out of the supreme court of the United States a writ of error for its review, and in that proceeding gave a bond with sureties. The receiver having ascertained that the company had given these sureties, a mortgage upon certain portions of its property in the state of New York, and an assignment of a mortgage covering other property, by way of indemnity against liability on the bond, reported these facts to the court whose officer he was, and, under its direction, employed counsel to argue the cause upon the hearing of the writ of error. A decision was afterwards made reversing the judgment, and awarding a new trial. But before the mandate was sent down it was discovered that the citation had been irregularly issued, inasmuch as it had been addressed to only one of the four parties who were plaintiffs below; and the supreme court, of its own motion, made an order requiring the parties to the writ of error to show cause why the decision should not for that reason be vacated and set aside, and the writ of error dismissed. Whereupon the receiver, by petition stating to the court his ignorance until that time of the proceedings in question, asked that by amendment the irregularity might be cured, so that the decision should stand, and the mandate of the court issue. As a reason for his interference, he stated in his petition that ‘upon taking charge of the property of the company,’ he found it incumbered by the mortgages and assignment above referred to ‘and that all of said property remained incumbered thereby, awaiting the issuance of the mandate of the court.’ The request was granted, and, after reargument, the mandate of the court was issued pursuant to the original decision. The receiver was never made a party to the record in either court, nor did he in any way take part in the conduct of the defense, nor control or direct it in any way. Subsequently, and on the twenty-fifth of January, 1886, the plaintiffs in the action took judgment by default against the company for $17,560.12 damages, besides costs; and presented that judgment as the sole, but, as they claim, conclusive, basis of a right to share in the funds of the dissolved corporation in the custody of the receiver. The claim so made was sent by order of the court to a referee to determine as to its validity, and he, upon the facts above stated, reported (1) that the judgment was without jurisdiction so far as the assets under the control of the court were concerned; (2) that the claim was not a valid charge, nor entitled to a distributive share of them. His report was confirmed by the special term, but its order to that effect was reversed by the general term of the supreme court, and an order made that the receiver allow the claim as valid against the assets of the company, and pay the same in the due course of the administration of his trust. From this order the receiver appeals, and we think properly.
As for the defendant of record, its dissolution put an end to the action, and at the time of the rendition of the judgment it had neither legal existence, capacity to be sued, nor any property against which a...
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