In re New Paltz & Wallkill Valley Railroad

Truax, J. In instituting these proceedings the defendants were acting as trustees and the expenses they incurred while so [452] acting, were incurred in preserving the "property, and should, be paid out of the funds in the hands of the receiver before all other liens, although the -receiver was not appointed in an action brought • by'the bondholders or their trustee. Union Trust Co. v. Illinois Midland R. Co., 117 U. S. 434. It was held .in Barnes v. Newcomb, 89 N. Y. 108, that where the officers óf an insolvent corporation believe it to.be solvent, and have reasonable grounds for such belief,' it is their duty to oppose an application for the dissolution of the corporation and their reasonable expenses in so doing should be allowed to them to be paid' out of the funds in the hands of the receiver.. It seems to me that if such expenses' should he allowed, it is right to allow the. expenses, incurred in protecting the property by procuring the appointment of a receiver, especially in view of the fact that the directors of the corporation who apply for the appointment of the receiver, and the dissohitipn .of the’ corporation, are not personally liable to the attorney for his services in the matter. Drew v. Longwell, 81 Hun, 144. The referee.has consented that his fee be reduced to the sum; of $200, 'and the moving party hereto acquiesces. To that extent the order heretofore made will be modified. In other respects the" motion is denied, without costs.' Order modified, and motion denied, without costs.