Hegewisch v. . Silver

Andrews, Ch. J. It is insisted in behalf of the plaintiff that the complaint was dismissed at the trial on the sole ground *418 that he was not the real party in interest, and that the only question which can now be considered arises on the exception taken by the plaintiff’s counsel to the ruling of the trial judge upon this point. If there were other grounds stated in the motion which were well founded, these, it is insisted, cannot be considered, because, having been overruled, and being such that if the motion had been entertained the objection might have been obviated by further evidence, it would be unjust to entertain them now for the purpose of sustaining the order of the General Term. On the other hand, it is contended in behalf of the defendant that the final ruling of the trial judge dismissing the complaint proceeded upon a reconsideration of all the grounds originally urged, and was not based alone upon the ground last stated in order upon the motion to dismiss, and that, therefore, all the questions raised were before the General Term. It is not necessary to consider this point, since we are of opinion that neither of the grounds upon which the defendant now relies to sustain the order originally made dismissing the complaint are tenable. These grounds are (1) that there was an absence of evidence tending to show that the plaintiff had filed a bond as receiver and perfected his title thereby, so as to enable him to bring an action, and (2) that a successor having been appointéd intermediate the commencement of the action and the trial, the action could not be further prosecuted until the new receiver had been substituted in place of the original plaintiff. In respect to the first ground, it is to be observed that it was presented as a ground for non-suit, and, therefore, if there was any evidence which would have justified an inference that the plaintiff had filed a receiver’s bond, a non-suit on this ground could not be sustained. The order of the United States court appointing the plaintiff receiver contained the usual provision that upon filing a bond, approved by the court or a judge thereof, in the penalty and with the conditions specified, he should take and hold possession of the property of the corporation of which he was appointed receiver. There was no direct evidence that a bond was filed, but it appeared *419 that on the 9th day of February, 1891, nearly three months after the order appointing the plaintiff had been made, npon application made to the same court and judge before whom the original proceeding was taken, the plaintiff was authorized and empowered to prosecute an action in the Supreme Court of the state upon the claim now in question, and pursuant to such authority this action was subsequently commenced. There was no suggestion in the course of the trial that the bond had not been filed until the motion to dismiss was made at the conclusion of the evidence. It seemed to have been assumed up to this time by both parties that the plaintiff had duly qualified. The defendant himself brought out the fact that the plaintiff had resigned his position as receiver, and that he ceased to be receiver on the 20th of January, 1892, implying that up to the time of his resignation he was the duly qualified receiver of the corporation. It is a reasonable inference that the court, when it granted the order to sue, was apprised of the facts affecting the plaintiff’s right to bring the action, and ascertained that he had duly qualified as receiver. He was the officer of the court, and the order made pre-snpposes that he had perfected his title by filing a proper bond. So, also, his continuing as receiver, and the fact that the position became vacant by his resignation more than a year after his appointment, implies that he had qualified. The question is not as to the weight of the evidence, but whether there was any evidence tending to show that the bond was filed. We think there was, and that a non-suit could not properly have been granted upon the ground suggested. It is unnecessary to consider the contention of the plaintiff that the defendant could not take the objection. It is generally true that an order appointing a receiver prescribes that a bond shall be filed before the receiver assumes to intermeddle with the property to which the receivership relates, and unless this provision is waived by the court, or by a party in interest having power to dispense with the bond, the receiver, before he undertakes the execution of the trust, must give security. (In re Christian Jensen Co., 128 N. Y. 550, and cases cited.) But as there *420 was evidence here justifying an inference that the bond had been filed, the point that the defendant could not raise the objection is not involved. The other ground upon which the dismissal of the complaint is sought to be justified proceeds upon the theory that the appointment of a successor to the original receiver pending the action, suspended its further prosecution until the new receiver should be substituted as plaintiff. This is not the rule in such a case. Section 766 of the Code is relied upon to sustain the contention of the defendant. There are two decisive answers. The section applies to statutory receivers only, and there is no suggestion that the appointment of the receiver in this case was by virtue of any statute, and not dn exercise by the court of its general equity jurisdiction, independent of any statute. In the next place, if section 766 applied to the case, the substitution of the new receiver was not jurisdictional, but the case could be prosecuted in the name of the original plaintiff, unless one of the parties applied for a substitution under that section. This was the construction of an analogous provision under the Revised Statutes (Sec. 14, tit. 1, ch. 7, pt. 3, 2 Rev. St., and ch. 299, sec. 3, Laws of 1832; Colegrove v. Breed, 2 Den. 125; Manchester v. Herrington, 10 N. Y. 164; Board of Excise v. Carlinghouse, 45 id. 249 ; Griggs v. Griggs, 56 id. 504.) But this case is directly within section 756 of the Code, which declares.that “ in case of a transfer of interest or devolution of liability, the action may be continued by or against the original party, unless the court directs the person to whom the interest is transferred, or upon whom the liability is devolved, to be substituted in the action, or joined with the original party, as the case requires.” We think the complaint was improperly dismissed on the trial, and that the order granting a new trial was proper. This leads to a reversal of the order of the General Term, and an affirmance of the order granting a new trial. All concur. Order reversed.