Sands v. E.S. Greeley & Co.
| Decision Date | 06 February 1897 |
| Citation | 80 F. 195 |
| Parties | SANDS v. E. S. GREELEY & CO. |
| Court | U.S. District Court — Southern District of New York |
Jones & Loughlin, John L. Hill, and Perkins & Jackson, for the motion.
Frederick G. Dow and Charles Rushmore, opposed.
This court is always chary as to allowing intervention by persons interested in the funds of a receivership. It does not grant such relief when all the rights of the parties applying may be conserved without it. Intervention implies the making of a new and independent party to the litigation, with an independent attorney, and, in many cases, an independent counsel. If one creditor is allowed to intervene, there is no reason why another similarly situated should not be accorded the same privilege; and it would soon come to pass that the orderly conduct of the proceedings would be obstructed by the large number of parties to be formally notified of each step and the expenses of administration, with allowances to attorneys and to counsel for the many separate creditors would be unnecessarily increased. The several petitions for leave to intervene are therefore refused, and the motions denied. Inasmuch, however, as the argument has covered many subjects, and it has been made apparent that the procedure in this circuit in cases similar to the one at bar is apparently not familiar to all who have appeared in this case, it seems appropriate to file a brief memorandum upon the disposal of these motions.
The receivers of this corporation were not appointed under a regular creditors' bill after judgment had been obtained against the defendant, and execution returned unsatisfied. The circumstances attending their appointment are as follows E. S. Greeley & Co. was a Connecticut corporation. It had for some time transacted business in this state, and had considerable tangible property here, in the shape of a plant a leased building, tools, raw material, manufactured and partly manufactured articles, and cash in bank. Possibly it also had property in other states, but that circumstance is not material. It became financially embarrassed to such an extent that, in the opinion of its officers and directors, it was practically insolvent, and, being of the opinion that a further effort to prosecute its business could only operate still more disastrously for all concerned, its officers and directors decided to wind up its affairs. Since it was a Connecticut corporation, the proper tribunal to take charge of such proceeding was the court of that state, and to such tribunal application was made for the appointment of receivers. Such appointment was at once made, and, by the operation thereof, all of the assets of the corporation in the state of Connecticut passed to the receivers. Of course, the Connecticut appointment gave the receivers no authority to seize the assets of the corporation in this state. There were many creditors here who had dealt with the corporation, and given it credit, because of the large amount of tangible property which it was known to hold in this state. As soon as any of these creditors might be advised of the insolvency,-- and they would be so advised as soon as news of the appointment of receivers in Connecticut might reach here,-- they could secure themselves by at once beginning suit in the state courts, and levying attachments upon the property here. Under these circumstances, the Connecticut receivers applied to this court for an order appointing them receivers of this court in an action brought by a resident of this state against the corporation. It was apparent that, if the property were seized and sold under attachment, it would be disposed of at a ruinous sacrifice, leaving no balance available for the creditors who were not in a position to secure themselves by attachment; but it seemed highly probable that if receivers were appointed to take charge of the assets here, and dispose of them without undue haste, a sufficient sum would be realized to pay all the resident creditors in full, and leave a surplus over for transmission to the court which was winding up the corporation. At the time this appointment was applied for, it was shown that some, at least, of the resident creditors...
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