MacNabb v. Porter Air-Lighter Co.

The Porter Air-Lighter Company was a foreign corporation organized under the laws of Maine, carrying on business in the State of Hew York, having its actual business office in the city of Hew York, where its factory was located, and where its assets and property were situated; On the 27th of March, 1897,' William H. MacHabb, secretary of the Porter Air-Lighter Company, brought a suit in equity in the State of Maine for the dissolution of said company under the laws of that State. A temporary receiver was appointed and an injunction granted restraining the officers of the company from carrying on its business, from exercising any of the *104franchises of the corporation, from collecting or receiving any debts or from paying out, selling, assigning or transferring any assets, moneys, lands, tenements or funds of said company. On the 29th of March, 1897, said MacNabb, being the secretary and treasurer and a stockholder of said company, commenced an action in this State to preserve the assets of the defendant company, the latter having no officer empowered to hold such assets, and all the assets of the corporation, except certain licenses and rights under contract being located in the State of New York. The corporation appeared in the action by John T. Easton as attorney for the defendant. In that action one Theodore L. Herrmann was appointed temporary receiver of the property and estate of the corporation within the State of New York. On the 4th of May, 1897, in the action in ■Maine a decree was entered dissolving the corporation and appointing a permanent receiver.. On the 5th of May, 1897, a judgment was entered in New York directing a distribution of the assets of the corporation among its creditors and stockholders and appointing said Herrmann as permanent receiver, Herrmann qualified, and is now acting as such receiver.

On the 19th day of May, 1897, the appellant filed his claim against the corporation, which was rejected by the receiver. Yarious negotiations were had in respect to the claim of the appellant, and finally, two years after the entry of the judgment, this motion was made to set the same aside.

• It is claimed upon the part of the appellant, first, that the court had no jurisdiction to- appoint a temporary receiver and to. enter a judgment of sequestration upon the complaint of a stockholder, who was also secretary and treasurer of the company, under section 1810 of the Code of Civil Procedure; second, that the court had no jurisdiction, the suit being brought by a non-resident of the State against a foreign corporation,, under section 1780 of the Code, no cause of action arising within the State of New York in favor of an officer of a corporation charged with the duty of preserving its assets; third, that the order appointing a temporary receiver and the judgment of sequestration were void, because entered without notice to . the Attorney-General as required by chapter 378 of the Laws of 1883, entitled “ An act in relation to receivers of corporations; ” fourth, that the court had no jurisdiction to appoint a temporary *105.-receiver because no notice was given to a proper officer of the corporation under the last clause of section 1810 of the Code; fifth, -that the judgment sequestrating the property and appointing a permanent receiver was void without proof of default in pleading, without proof of service of notice of application for judgment, and Without proof of the facts alleged in the complaint, either by reference or writ of inquiry for the purpose of enabling the court to vender a judgment under sections 1214 to 1216 of the Code.

It would seem that the first and second objections to the validity -of the judgment are answered by a reference to section 1810 of the -Code, for the reason that it is expressly provided by the 3d subdivision of that section that such an action may be brought by a .stockholder to preserve the assets of a corporation having no officer •empowered to hold the same. The fact that a stockholder is also .an officer of the company does not seem to take away the rights which the section conferred upon him as a stockholder. By the proceedings in Maine the officers of the corporation were prevented from administering the assets of the corporation, and it was necessary that a receiver should be appointed in this State in order -that they might be preserved and equally distributed amongst its «creditors.

The objection that the proceeding is void because no notice was .given to the Attorney-General is not well taken, because it is apparent that the provisions of chapter 318 of the Laws of 1883 relating to this subject apply only to domestic corporations. As far as ihe appointment of the temporary receiver is concerned, that has been superseded by the judgment now sought to be set aside, and it is too late to question its regularity. A receiver has been appointed in pursuance of a final judgment which was entered upon appearance of the corporation.

The objection as to the regularity of the proceeding seems to ■have been made too late. In any event the recitals in the judgment, until impeached by positive proof or evidence of fraud, show' -that the court had jurisdiction to make a decree in the manner in which it did. The appellant having delayed for so long .a period in taking measures to set aside this judgment after having endeavored to secure rights under it, it is manifest that unless the same is *106absolutely void the court should not set it aside. It appears front the papers presented to this court that it had jurisdiction because of the existence of assets in this State which it was necessary to preserve at the suit of a stockholder who took the proceedings that he did looking to that end. . '

The order should be affirmed, with ten dollars costs and disbursements.

Patterson, O’Brien, Ingraham and McLaughlin, JJ., concurred.

Order affirmed, with ten dollars costs and disbursements.