Boothe v. Spellman

Rumsey, J.:

On the 20th day of June, 1896, John H. Spellman was, by an order of this court, appointed temporary receiver of the Muehlfeld & Haynes Piano Company in proceedings which had before that time been taken for a voluntary dissolution of the corporation. He forthwith executed his bond and qualified as such receiver. Precisely when the proceedings for the voluntary dissolution of the corporation had been begun does not appear in. the papers, but it is fair to assume that it was some considerable time before the appointment of the receiver. After the receiver had qualified he learned that on the 9th day of June, 1896, theMuehlfeld & Haynes Piano Company had executed to William F. Boothe a general assignment for the benefit of its creditors, which was recorded in the office of the clerk of the county of Hew York on the 10th of June, 1896, and that on the same day the assignee took possession of all the property and assets of the corporation, claiming to be the -owner of them under the general assignment. Such being the condition of affairs on the 2d of July,, 1896, the receiver demanded of the attorneys for the assignee the books of account of the company, which they refused to deliver to him, upon the ground that they held the books for the assignee, who was entitled to the possession of them. Thereupon the receiver procured an order to show cause why the assignee and his attorneys should not be directed to deliver to the receiver the books of. account, and all books and papers of the company in their possession, and for other relief. When that motion came on to be heard an order was made directing the attorneys and the assignee to deliver to the receiver, not only the books of account and all books and papers of the company, but all property of the company of every lcind in the possession of either of them. From that order this appeal is taken.

We do not think it necessary, upon the determination of this appeal, to examine into or decide the merits of the case, so far as to determine whether the order appointing the receiver took precedence of the general assignment. The case, as we look at it, is not now in a situation where that question can properly be determined. It appears that the general assignee was no party to the proceedings for the appointment of a receiver, and that before the receiver was appointed he had taken into his possession all the property of the company, claiming that he had become the owner of it by virtue of the general assignment, which had been executed and recorded. The proceeding was, therefore, one not simply to determine the right of possession of the property, the title to which was not disputed, but to decide as to the ultimate right to the property of the company between two persons, each of whom presented a paper title. The serious question, therefore, was the question of property. The receiver sought,- in this summary way, to take away from the assignee the property of which he claimed to be the owner. We do not think it can be done in this way. When one claims as receiver the right to property which is in possession of a third person, who claims, for any reason, the right to retain it as owner, the receiver should proceed by suit in the ordinary way, unless in some way the claimant to the property has been made a party to the proceedings in which the receiver was appointed, so that the court has jurisdiction of him in that action. (Parker v. Browning, 8 Paige, 388, 391.) The right of a person to a trial by jury in every case where his property is sought to be taken'from him, is well settled, and no one can be deprived of that right unless his situation with regard to the proceeding in which it is sought to take away his property is such that the court has in that proceeding or action acquired jurisdiction, not only of the subject-matter, but of his person. It has not been made to appear here that the court had any jurisdiction over Boothe as assignee in the proceedings for voluntary dissolution. As to that proceeding he was a stranger, and he stood in the same relation to the receiver appointed therein as any other stranger. For that reason, we think that the court should not have granted this motion, but that it should have been denied, without prejudice to the right of the receiver to bring an action for the recovery of this property. (Olmsted v. The R. & P. R. R. Co., 46 Hun, 552; People v. O’Brien, 111 N. Y. 1, 62.)

- Yan Brunt, P. J., Barrett and Ingraham, JJ., concurred; O’Brien, J., dissented.