wages of the employees, operatives and laborers thereof shall be preferred to every other debt or claim against such corporation, and shall be paid by the receiver from the moneys of such corporation which shall first come to his hands 45 Hun, 329; 103 N. Y., 245. L. 1886, Chap. 310- An act to provide for the winding up of corporations which have been annulled and dissolved by legislative enactment. Attorney-general to bring suits for winding up dissolved corporations. SECTION 1. Whenever any corporation organized under the laws of this state shall be annulled and dissolved by an act of the legislature, it shall be the duty of the attorney-general immediately thereafter to bring a suit to wind up and finally settle and adjust the affairs of such annulled and dissolved corporation. 45 Hun, 519. Suits, how brought; who to be named as defendants. § 2. Such suit shall be brought in the supreme court in the name of the people of the state, in any county which the attorney-general may select. The president, or vice-president, or secretary, or treasurer of such dissolved corporation, who may have been in office at the time of the dissolution thereof, shall be named, as such officer, as defendant in such suit, and the summons and complaint therein shall be served upon him. If, at the time of such annulment and dissolution, there shall not be one of the above designated officers of such corporation, then such suit shall be brought against and the summons and complaint therein served upon any one of the persons who were last acting as directors of such corporation. Court to appoint receiver; rcceiver's bond; officers, etc., not to be appointed. § 3. It shall be the duty of the special term of the supreme court in the county designated in such summons and complaint, or of any judge of said court who resides, in the judicial department in which such county is situated, upon the presentation of a certified copy of the act of the legislature annulling and dissolving a corporation, and of the summons and complaint founded thereon, immediately to appoint a receiver of the assets and property of such dissolved corporation; and the person so appointed shall be both the temporary and permanent receiver thereof, and shall give a bond with sureties to be approved by said court or such judge thereof, to the people of the state in the penalty of not less than ten thousand dollars, conditioned for the faithful discharge of his duties as such receiver, and for his due accounting for, and paying over all moneys and property which may come to his hands as such receiver. No one of the officers, directors or stockholders of such corporation shall be appointed such receiver thereof. Receiver to cause inventory to be made. § 4. Such receiver shall, immediately after his appointment and the approval of his bond, cause an inventory of all the property of such dissolved corporation to be taken and filed in the office of the clerk of the county in which such action is pending, and for the purpose of ascertaining the nature, extent and location of such property, the said receiver shall have power to compel the attendance of witnesses, as hereinafter provided, and all evidence taken by or before said receiver in relation to such property shall be filed by him in the office of such county clerk. 45 Hun, 519. Notice to creditors to present claims; proof of claims; list to be filed; application for sale of property; proceedings thereupon. § 5. The said receiver shall, immediately after his appointment, publish in two newspapers to be designated by said court, or such judge thereof, daily for one week, and for such longer time, not exceeding one month, as the said court or such judge thereof may by order designate, a notice to all creditors of such dissolved corporation to present their claims and demands against, and all evidences of indebtedness of, such dissolved corporation, to such receiver at a time and place to be designated in such notice. Such receiver is hereby authorized to examine on oath any of such creditors, or claimants, or other witnesses, as to any and all matters pertaining to any claim or de mand or evidence of indebtedness so presented. At the expiration of ten days from the date specified in such notice, or within such further time as may be allowed by said court or such judge thereof, the said receiver shall make a list of all the claims presented to or proved before him, in which list he shall specify the amount, origin and true consideration of each claim so presented to or proved before him, and the name of the person in whose behalf the same is presented or proved, and the date when such claimant became the true owner thereof. Such list, when so completed, shall be verified by such receiver, and shall thereupon be filed, together with such evidence as may have been taken by him, in the office of the said county clerk. The said receiver shall, immediately after such filing, publish a notice daily for fourteen days in two newspapers to be designated by said court, or such judge thereof, stating that such list will be presented to such court, or to a judge thereof, residing in such county, on a day and at a place to be designated in such notice, and the said court, or such judge thereof, will then and there be asked for an order directing the sale at public auction of all the property specified in such inventory. Any creditor or stockholder may appear and be heard at such time and place. It shall be the duty of said court, or of such judge thereof, to whom such list shall be presented, to examine the same together with such evidence as the receiver shall have taken, and to reject all claims, demands and evidences of indebtedness which were not legally incurred or created by said corporation, or which were in excess of its powers, or which are for any reason shown to be illegal; and no claim or demand shall be allowed for any greater amount than the money value of the consideration therefor, unless the said court or judge shall find and decide from the evidence taken by and before the receiver, that the person professing to own such claim does in truth own the same by reason of having taken a negotiable instrument or paper before the act dissolving and annulling the corporation alleged to be bound by such instrument or paper, and also before such instrument or paper was by its terms due, and that the same was taken for value paid and parted with in good faith before said act of dissolution and without knowledge or notice of any defect, want or deficiency of previous consideration, or other equity, offset, or defense originally attaching to such instrument or paper, or to the claim or demand upon which the same are founded. Such examination and rejection shall be made by such court or such judge thereof, and not by any referee. Claims not presented to be barred; rejected claims, proceedings as to; appeal; order for property to be sold; proceedings thereupon; receiver's compensation; distribution to creditors and stockholders. §6. All creditors whose claims shall not have been presented as above provided shall be debarred from participating in the avails of the sale of the property described in said inventory. Any creditor whose claim may have been rejected, and who shall have appealed, may apply to said court or such judge thereof for an order that a pro rata amount of the avails of such sale which would have appertained to the claim of such creditor, had not the same been rejected, may be retained in court to abide the result of his appeal, and said court, or such judge thereof, shall have discretion to grant the same. Any claim-. ant feeling aggrieved by such rejection may appeal therefrom to the general term and to the court of appeals, in the manner now provided by law for such appeals from orders in civil actions, but neither of such appeals shall stay the proceedings of such receiver, or court, or judge thereof, or a sale of such property as herein provided for. The amount of all claims and demands so rejected by said court or such judge shall be deducted from the total amount of claims and demands so filed by the said receiver, and an entry of such rejection shall be made upon said list by said court or such judge, and thereupon the said court or such judge shall by order, reciting the proceedings direct the immediate sale by said receiver, at public auction, at a time and place and in the manner, and after such notice as may be provided in said order, of all the property in said inventory specified, to such person, firm or corporation as shall bid the highest sum or amount therefor. The receiver shall report to said court or such judge thereof, the name of the highest bidder, the amount bid, and thereupon said court or such judge thereof shall by order forthwith direct the said receiver by proper written instrument to convey and transfer all of the property described in said inventory, and offered for sale at said auction, to said highest bidder, who on receiving the same shall pay to the receiver the sum bid. The said court or such judge thereof, shall allow to the receiver two per cent upon the whole amount received by him from the sale of the property described in said inventory for his compensation as such receiver, and also his disbursements, including witness' fees, and the service of subpoenas, and to the attorney-general, and to such other counsel as the receiver may find it necessary to employ, a reasonable counsel fee. The residue of the amount in the hands of the receiver shall be by him distributed among the owners of the claims in said list, which have been allowed subject to the deductions above provided for in case of an appeal, pro rata, or in full if such residue shall be sufficient therefor, and the receipts of such owners therefor shall be taken upon such list of claims. The balance of such residue, if any, shall be distributed among the lawful stockholders of such corporation in proportion to their interest therein. No stay of proceedings. § 7. No issue raised by answer, or demurrer, or otherwise to the complaint herein before provided for shall stay the proceedings of the receiver, or court or a judge thereof. Final discharge of receiver, proceedings for. § 8. The said receiver after such payment may apply to said court, or a judge thereof, for his final discharge, and if it shall appear that the said receiver has in all things fulfilled his duty in the premises, the said court or judge shall grant such final discharge, and said receiver, until so discharged, may as such receiver sue for and collect all debts due, and demands owing to such corporation. County clerk, to issue subpoenas on request of receiver; oaths to witnesses; penalties. § 9. It shall be the duty of the clerk of the county in which such suit is brought, to issue, upon the request of the receiver, subpoenas to compel the attendance of witnesses to enable him to ascertain the nature, extent and location of the property of said corporation, and to give evidence concerning any claim which may be presented by any creditor against the estate of such corporation, which subpoenas shall be served in like manner as in civil actions, and the fees of the witness shall be the same as are now established by law in such actions. The receiver shall have full power and authority to administer oaths to all such witnesses and to any creditor of such dissolved corporation, and to examine them concerning the property of such dissolved corporation, and as to the claims presented against it. Disobedience to such subpoenas shall be a contempt of court, and shall be punished in like manner as other contempts of court are now punishable. Wilful false swearing by any witness or creditor in any such examination shall be deemed perjury, and shall be punishable as such in like manner as if committed by a witness on a trial of a civil action. Suits and injunctions against receiver regulated. § 10. All applications for leave to sue such receiver and all applications for injunctions to restrain his proceedings shall be made only to the supreme court in the county in which such action was brought, and shall not be made to any other court, or to the supreme court in any other county, and shall not be granted except upon eight days' notice to the attorney-general of the time and place of making such application. In any action hereafter brought or now pending by the attorney-general, to close up, determine or settle the affairs of any corporation dissolved by legislative enactment, the judgment or determination of the supreme court at general term may be reviewed upon appeal to the court of appeals, as now provided by law, whether the judgment rendered in the case be interlocutory or final. [Thus amended by L. 1887, ch. 601.] 45 Hun, 519. Repeal of other acts. § 11. This act shall take effect immediately, and all acts and parts of acts inconsistent therewith are hereby repealed. ARTICLE THIRD. OF THE VOLUNTARY DISSOLUTION OF CORPORATIONS. SEC. 58-65. [Repealed.] 66. Who may be receivers; security to be given. 70. Notice to be given by receivers; its contents. 71. Acts of corporation after presenting petition, void. 72. Debtors to account to receivers; their powers to discover debts, etc. 73. Power of receivers to refer controversies; proceedings. 74. Duties of receivers; to call meetings of creditors, etc. 75. Subsisting contracts how cancelled. 76. Commissions to be allowed to receivers. 77. To retain monies to cancel subsisting contracts. 78. Also to meet recovery in suits pending. 79. Order of payment of debts. 80. Second and final dividend when to be made, how notified. 81. Proceedings therein; to be final, except certain cases. 82. Receivers not to be answerable for debts not exhibited. 83. Surplus to be distributed among stockholders. 84. Application of monies retained to meet suit. 85. Power of court of chancery over receivers. 86 When to render account on oath to court. 87. Notice of intent to render, when and how to be published. 88. Duty of master to whom account is referred. 89. Settlement of account by court, its effect; further accounts, etc. 90 & 91. [Repealed.] [Sections 58-65 were repealed by L. 1880, ch. 245.] [Sections 66 to 89, both inclusive, were saved by the repealing act of 1880, which declared them applicable to a receiver appointed as prescribed in § 2429 of the Code of Civil Procedure.] ART. 2. [467] [468] Pr. R., 57. § 66. Any of the directors, trustees or other officers of such Receivers; security. corporation, or any of its stockholders, may be appointed receivers, 16 How who, before entering upon the duties of their appointment, shall give such security to the people of this state, and in such penalty, as the court shall direct, conditioned for the faithful discharge of the duties of their appointment, and for the due accounting for all monies received by them. rights. § 67. Such receivers shall be vested with all the estate, real and [469] personal, of such corporation, from the time of their having filed Their the security herein before required, and shall be trustees of such estate for the benefit of the creditors of such corporation and of its stockholders. 1 N. Y., 332; 26 Barb., 59, 311; 23 Barb., 656; 1 Barb., 148; 3 Wend., 13; 22 How. Pr. R., thority. 68. Such receivers shall have all the power and authority con- Their au ferred by law upon trustees to whom an assignment of the estate of insolvent debtors may be made, pursuant to the provisions of the fifth chapter of the second part of the Revised Statutes. 36 N. Y., 350; 6 Bosw., 638; 55 Barb., 219; 4 T. & C., 622; 5 Robt., 362; 1 N. Y., 332; 23 arrears of § 69. If there shall be any sum remaining due upon any share of To prosestock subscribed in such corporation, the receivers shall imme- cute for diately proceed and recover the same, unless the person so indebted stock. shall be wholly insolvent; and for that purpose may file their bill 109; 21 in the court of chancery, or may commence and prosecute an action 12 Barb., at law, for the recovery of such sum, without the consent of any of the creditors of such corporation. 25 Barb., Barb., 619; 672;2 Barb., 298; Barb., 656; 1 Barb., 298; 6 Bosw., 638; 28 Hun, 375; rev'd 92 N. Y., 7. TITLE 4. exhibited. § 82. After such second dividend shall have been made, the Debts not receivers shall not be answerable to any creditor of such corporation, or to any person having claims against such corporation, by virtue of any open or subsisting engagement, unless the demands of such creditor shall have been exhibited, and the engagements upon which such claims are founded, shall have been presented to the said receivers, in detail and in writing, before or at the time specified by them in their notice of a second dividend. Surplus to stockhold ers. 6 Paige, 503; 45 N. Y., 316. Money retained [472] Control of receivers, &c. 6 Paige, 226. Account by them. Previous notice thereof. Master's duty. [L. 1821, 141, § 4.]— § 83. If after the second dividend is made, there shall remain any surplus in the hands of the receivers, they shall distribute the same among the stockholders of such corporation, in proportion to the respective amounts paid in by them, severally, on their shares of stock. § 84. When any suit pending at the time of the second dividend, shall be terminated, they shall apply the monies retained in their hands for that purpose, to the payment of the amount recovered, and their necessary charges and expenses; and if nothing shall have been recovered, they shall distribute such monies, after deducting their expenses and costs, among the creditors and stockholders of the corporation, in the same manner as herein directed in respect to a second dividend. § 85. The receivers shall be subject to the control of the court of chancery, and may be compelled to account at any time; they may be removed by the court, and any vacancy created by such removal, by death or otherwise, may be supplied by the court. § 86. Within three months after the time herein prescribed for making a second dividend, the receivers shall render a full and accurate account of all their proceedings to the court of chancery, on oath, which shall be referred to a master to examine and report thereon. § 87. Previous to rendering such account the receivers shall insert a notice of their intention to present the same, once in each week, for three weeks, in the state paper, and in a newspaper, of the county in which notices of dividends are herein required to be inserted, specifying the time and place at which such account will be rendered. § 88. The master to whom such account shall be referred, shall hear and examine the proofs, vouchers and documents offered for or against such account, and shall report thereon fully to the court. § 89. Upon the coming in of such report, the court shall hear the allegations of all concerned therein, and shall allow or disallow such account, and decree the same to be final and conclusive upon all the creditors of such corporation, upon all persons who have claims against it, upon any open or subsisting engagement, and upon all the stockholders of such corporation. Such receivers shall also be render- account from time to time in the same manner, and with the like Settlement of account; its effect. Further accounts to ed. effect, for all monies which shall come to their hands after the rendering of such account, and for all monies which shall have been retained by them for any of the purposes herein before specified, and shall pay into court all unclaimed dividends. [Sections 90 and 91 were repealed by L. 1880, ch. 245.] |