In re Le Blanc

The Erie Railway Company, on or about the 2d day of September, 1878, declared a dividend of one per centum upon its *9common stock, payable on and after the first day of October then following. The petitioner was, at the time, and has since continued to be, the owner of 500 shares of the stock of said company, of the par value of $ 100 each. The Company deposited with Duncan, Sherman & Co., a sum sufficient to pay, and for the purpose expressly of paying the dividend thus declared. On the 10th day of December, 1874, there remained of such sum in the hands of Duncan, Sherman & Co., $4,918.85, -which was withdrawn by said Erie Railway Company. Hugh J. Jewett was appointed receiver of the Erie Railway Company, and as such assumed control of the funds in the possession of such company including the amount withdrawn from Duncan, Sherman & Co. The respondent having been absent, neglected to draw his dividend while the fund was in the hands of Duncan, Sherman & Co.

lie presented his petition to the Supreme Court, at Special Term, and obtained an order directing the receiver to pay to said petitioner $500, the amount of his dividend, and the receiver appeals from such order.

We conclude that the fund deposited with Duncan, Sherman & Co., should be regarded as specially appropriated for the payment of the dividend made by the company, and that the stockholders acquired in equity a lien upon such fund to the extent of the amount to which they were respectively entitled. That such lien' followed the fund in the hands of the receiver, who holds the same as trustee for the benefit of such stockholders. (Le Roy v. The Globe Ins. Co., 2 Edw. Chy. Rep., 656; Lowene v. The American Fire Ins. Co., 6 Paige, Chy. 484. In the case The Attorney General v. The Continental Life Ins. Co., In re Betsey A. Merrill, which has been very recently decided by the Court of Appeals, while that court reversed the decision of the Supreme Court upon the facts of that case; yet the reasoning contained in the opinion of Judge Church, decidedly confirms the right of the petitioner in this case, upon the facts hero presented, and furnishes in our judgment, an authority in support of the order appealed from. The appellant further insists that the respondent should have proceeded by action instead of by petition. No such question was raised before the Special Term. Again, we perceive no substantial reason why, in a case like the present, a petition is not proper. *10The parties should not be subjected, unnecessarily to the delay and expense of an action, when it is clear that the rights of all partios can be protected in this form of proceeding. Nothing is shown which induces us to doubt the propriety of the application by petition.

The order should be affirmed, but without costs, as the appellant is an officer of this court.

Order affirmed without costs.