Wheaton v. Daily Telegraph Co.

• Court: U.S. Court of Appeals — Second Circuit
• Citation: Wheaton v. Daily Telegraph Co., 124 F. 61 (2nd Cir. 1903)
• Decision Date: 01 July 1903
• Docket Number: 171.
• Parties: WHEATON v. DAILY TELEGRAPH CO.

124 F. 61

WHEATON v. DAILY TELEGRAPH CO.

No. 171.

United States Court of Appeals, Second Circuit.

July 1, 1903

Kneeland Moore, for appellant.

Chas W. Gould, for appellee.

Appeal from the Circuit Court of the United States for the Southern District of New York.

Before WALLACE, TOWNSEND, and COXE, Circuit Judges.

WALLACE Circuit Judge.

This is an appeal by the New Amsterdam National Bank from an order made in the above-entitled cause requiring it to pay over to the receiver of the defendant, the Daily Telegraph Company, a sum of money alleged to be the balance of a deposit account. The receiver was appointed in an equity suit brought by a stockholder of the Daily Telegraph Company in behalf of all the stockholders and creditors of the company to administer its assets. The company had kept a bank account with the New Amsterdam National Bank, and at the time when the suit was commenced the account showed a balance in its favor of about $2,000 arising from the moneys it had deposited over those it had drawn out. The bank alleges that at the time it held and owned a note of the company for $6,500, which was then due and payable. It refused to pay the balance of the deposit account to the receiver upon the contention that it was entitled to apply that balance towards the payment of the note. It resisted the application for the order, as well in respect to the nature of the remedy invoked as upon the merits of the receiver's claim. The order requiring it to pay over to the receiver seems to have proceeded upon the theory that primarily the receiver was entitled to the custody of the fund, and if it should ultimately appear that the bank was entitled to retain the amount, either as a payment or as a set-off against its note, the court would make restitution.

We think this an erroneous disposition of the matter. In an action like the present, to marshal and administer the assets of an insolvent corporation, it is optional with the plaintiff to join as parties defendant such persons as claim an adverse interest in assets in their possession alleged to belong to the corporation; and when this has been done, and a receiver has been appointed, the court upon hearing the parties will determine whether the custody of such assets shall, pending final decree, remain unchanged, or whether it shall be transferred to the receiver. Such a determination does not adjudicate or affect the ultimate rights of the parties; it extends only to the conservation of the assets until these rights are finally ascertained. Whether their custody shall be changed rests in the sound...