In re Volk House Wrecking Co.

Smith, J.: These appeals will be considered together, as they are somewhat interrelated. The Volk House Wrecking Company was a corporation engaged in the wrecking of buildings, with an authorized capital stock of fifty shares. Ten shares only had been issued, of which Albert Volk was the owner of fo.ur shares and Jacob Volk the owner of six shares. Three directors had been originally named, but one of them had resigned, so that there were acting only two directors, Albert -Volk and Jacob Volk. They were unable to agree, and Albert Volk petitioned the court for a voluntary dissolution of the corporation under section 172 et seq. of the General Corporation Law (Consol. Laws, chap. 23; Laws of 1909, chap. 28). In that proceeding the court referred the matter to a referee, before whom the matter was tried out. The referee made his report. Exceptions were filed thereto by Albert Voile, but upon the motion of Jacob Volk the report was substantially confirmed by the final order made. From the order confirming that report Albert Volk appealed to the Appellate Division but failed to print his papers and his appeal was dismissed (180 App. Div. 931). Thereafter the Attorney-General made a motion to revoke or modify the final order, by which order practically all matters which had been adjudicated in the determination of the referee and in the final order were reopened, including the adjustment of the equities between the stockholders. The ground for the interposition of the Attorney-General was, first, that he had not received proper notice of the application for a final order, and that the proper papers had not been served upon him; secondly, that a tax was due from the corporation for dividends declared; thirdly, that there had been no notice to creditors to present their claims, and further, that the adjustment of the equities between the stockholders was erroneous and greatly to the disadvantage [251] of Albert Volk. From the order modifying the final order Jacob Volk appeals to this court. This is the appeal first-mentioned herein. By reason of recitations in the final" order upon the appeal, Jacob Volk would be required to print a large amount of evidence taken before the referee. He made application to the court to be excused from printing that evidence. That application was granted upon Jacob Volk stipulating to raise only certain questions of law upon his appeal. From this order granting this motion to limit the papers to be printed upon appeal, Albert Volk has here appealed, and this is the second appeal. The first question to which Jacob Volk stipulated that he would confine himself was, whether the Special Term could overrule the referee and make findings of its own or had only the limited power to make a final order to conform to the decision of the referee. It is insisted by the Attorney-General that the referee under the statute had no authority to make any other determination than of the question whether the corporation should be dissolved, and the adjustment of the equities between the stockholders was a matter to be determined by the receiver after his appointment or by the court and was not within the province of the referee originally appointed in the proceeding. Where the statute names the" reference as one to hear and determine, nevertheless it is provided that the final order must be made by the court, and notice of application for the final order is specifically required to all persons who have made an appearance in the proceeding. In my view of the case, however, that question is not necessarily here for determination. The reference was had and the referee’s report assumed to determine the relative rights of the two stockholders. In the final order that report, was confirmed. The appeal of Albert Volk thereafter was. dismissed, and it would seem clear that Albert Volk, having, forfeited his right to review that determination, cannot indirectly through the Attorney-General obtain the right which he himself has forfeited. The Attorney-General is interested for two purposes only: First, that the State may recover the tax lawfully assessed by reason of the dividends declared, and secondly, that creditors are properly protected. I will assume, because it is not .questioned here, that the [252] receiver appointed by the final order should advertise for creditors. The final order was then correctly modified to the extent of directing the receiver to pay the tax properly assessed in respect of the dividends declared and also to compel the receiver to advertise for claims before making final distribution between the stockholders. To the extent, however, that the final order assumed to reopen the adjustment of the equities between the stockholders, the court was without power so to do upon the application of the Attorney-General and to that extent the order appealed from, modifying the final order, should itself be modified (See Matter of Seneca Oil Co., 153 App. Div. 594; affd., 208 N. Y. 545; also Gen. Corp. Law, §§ 186, 187.) Inasmuch as this determination is made without considering the ground for the determination of the equities between the stockholders, it would seem that the order limiting the papers upon appeal to exclude the stenographer’s minutes was properly made, and that order should be affirmed. Clarke, P. J., Scott, Davis and Shearn, JJ., concurred. Order modifying final order modified as stated in opinion. Order limiting papers on appeal affirmed. Order to be settled on notice.