Herring agt. New York, Lake Erie and Western R. R. Co.

or manner during his receivership, subject, however, to any lawful lien or liens existing thereon, whether created by the receiver or otherwise." The judgment of foreclosure described the property directed to be sold thereunder by the description contained in the mortgage, to which is added these words: "And this description is to be understood as embracing and including all and singular the choses in action, stocks, bonds, book accounts, bills receivable and other evidences of indebtedness, &c., and other property hereinbefore mentioned." And all such property was in the end sold by the referee, in pursuance of the terms of the judgment, and was purchased by Morgan and others, his associates, as trustees, as has been already mentioned. This sale under the judgment was subsequently confirmed by the court. By an order made in the action upon the petition of the receiver, he was subsequently authorized and directed to transfer and deliver to the New York, Lake Erie and Western Railroad Company, to whom a conveyance of the property had been made by the trustees, all the property and franchises whereof he was possessed as receiver in the action, and which were embraced, or intended to be embraced, in the judgment of foreclosure, subject to the reservations and exceptions therein, and “subject to all and singular the rights of the people of this state in and to the premises, or any part thereof, as the same may be ascertained on due inquiry and examination by the attorneygeneral in the action of The People of this State agt. The Erie Railroad Company, now pending, to the end that such rights and interests may be fully protected as if this transfer had not been ordered and directed."

In pursuance of this order, Jewett, the receiver, transferred and delivered to the New York, Lake Erie and Western Railroad Company all the property referred to in the order, and which had been sold by the referee under the judgment of foreclosure, subject, however, to the terms of the order. Afterwards, upon the petition of the attorney-general, presented by him in the action in favor of The People of this

Herring agt. New York, Lake Erie and Western R. R. Co.

State agt. The Erie Railroad Company, an order was made referring it to a referee to take testimony for the purpose of ascertaining what property or assets, if any, the receiver in the foreclosure action acquired, held or disposed of, not covered by or subject to the lien of the mortgage above mentioned, which had been foreclosed, and if any such property had been disposed of by said receiver, what disposition has been made thereof, and also what rights and equities, if any, the said Farmers' Loan and Trust Company and the purchasers at the mortgage sale of the mortgaged premises, or their assigns, had or have in or to such property or assets, or any part thereof. Afterwards, by a supplemental complaint, first in the people's action, the New York, Lake Erie and Western Railroad Company was brought in as a defendant, and the foreclosure proceedings were set up, and it was alleged in the reply of the people to the answer of the Farmers' Loan and Trust Company to the supplemental complaint, that during his receivership the said receiver had lawfully acquired, for the benefit of the estate of the Erie Railroad Company, certain other property, including stocks and bonds of other corporations, which were not affected by the said mortgage, nor subject to the lien thereof; and the reply alleges, in substance, that this property had been improperly, wrongfully and unlawfully included in the judgment entered in the action to foreclose the mortgage and in the sale thereunder, and was wrongfully and improperly included in the deeds to the New York, Lake Erie and Western Railroad Company from the purchasers at the sale.

Hearings were had before the referee appointed in the people's action, from time to time, upon the subject matters referred, and upon the coming in of the referee's report a final judgment was entered in that action upon the 25th day of November, 1879, in which it was adjudged that the referee's report, which had been made, should be confirmed. And it was further adjudged as follows: "That the receiver in this action did not at any time acquire, hold or dispose of any

Herring agt. New York, Lake Erie and Western R. R. Co.

property of any kind not covered by or subject to the lien of the mortgage of the said defendant, the Farmers' Loan and Trust Company." And it was further in substance adjudged, the language of the judgment itself having been above given, that the conveyances made by the referee in pursuance of the sale under the judgments, and the conveyances and assignments subsequently made, by which the title to all the property, in the end, came to the ownership and possession of the defendant, the New York, Lake Erie and Western Railroad Company, "did vest in the said company a good and valid title to all the property of every kind and description embraced and described in the said judgment and in the said several conveyances and assignments."

It seems to me quite clear that by these judgments, the subject matter, which is presented in this action, has been fully adjudicated, and as these things all appear by the plaintiff's complaint, they lead to the conclusion, which is irresistible, that no cause of action is disclosed by the plaintiff's pleading.

But it is urged that no notice was given of the hearings before the referee to the unsecured creditors of the Erie Railroad Company, including the plaintiff, and that it was a necessary step to the acquisition of jurisdiction by the court, to hear and pass upon the accounts presented to and passed upon by the referee, and the results of the hearing before him, and to the rendering of final judgment, that such notice to creditors should have been given.

It is also claimed in this connection, on the plaintiff's behalf, that the receiver, Jewett, never advertised any notice of his appointment, as such, or any notice to creditors holding open or subsisting contracts of the Erie Railroad Company, or to other creditors, to present their claims to him; and that the provisions of the statutes of this state, which cast duties of the character above mentioned upon the receivers of corporations, applied to the receivership under consideration.

I am persuaded that the receivership of Jewett, as consti

Herring agt. New York, Lake Erie and Western R. R. Co.

tuted, and as it existed before the final judgment in the people's action, was not of such a nature as to make it subject to the statutory provisions to which reference has been made by the learned counsel for the plaintiff. When a court of equity acquires jurisdiction under a statute or otherwise, to dissolve a corporation, and that was the object of the people's action, and when the dissolution is ordered, the property and estate of the corporation is to be administered in pursuance of existing statutes, but if there are no statutes on the subject, then under the general powers of a court of equity and according to its rules and practice.

The Revised Statutes do make provision for the appointment of a receiver in an action brought against a corporation by a judgment creditor, as also in actions against moneyed corporations and insurance companies, and in the case of the voluntary dissolution of a corporation. But no statutory provision appears to have been made for the appointment of a receiver in an action commenced by the attorney-general for the dissolution of a corporation under section 38 of article 2, title 4, chapter 8, part 3, on the ground of its alleged insolvency. Section 430 of the Code of Procedure authorizes an action by the attorney-geneal for the purpose of vacating or annulling the existence of a corporation for causes which are therein designated, amongst which are "when it shall have done or omitted any act which amounts to a surrender of its corporate privileges and franchises." It was, however, claimed by the learned counsel for the defendant that the proceedings of the attorney-general were founded upon section 38 of the statute above referred to. But I do not think that this point is decided by determining whether the people's action was under the statute referred to or under the Code of Procedure.

Section 444 of the Code provides for the appointment of a receiver in an action brought in pursuance of its provisions, "after judgment," and it is made the duty of the attorneygeneral, after judgment, to institute proceedings for the appointment of such receiver.

Herring agt. New York, Lake Erie and Western R. R. Co.

But there is ample power in the court in which the action is pending, before judgment, to protect the property of a corporation against which such an action has been brought, by the appointment of a temporary receiver, and such receiver would be subject to the order and control of the court.

It is a familiar power exercised by a court of equity to appoint, at the very commencement of the action, if grounds therefor exist, a temporary receiver to take the mere care and control of the property until the court shall in the end. determine what shall be done with it.

In the complaint in the people's action, after the demand. for judgment that the corporation be dissolved, it is asked that in the meantime, and while such proceedings are being had and taken in the premises, "a receiver may be appointed to take hold and possess, under the immediate authority and direction of this court, all and singular the franchises, property, railroad and appurtenances of the said company," and in substance, with power to operate the road and to preserve and protect the corporate existence until the final judgment, and to borrow money on the pledge of the corporate property and the rents and revenues thereof subject to the order and direction of the court.

As Jewett was not, before judgment, a receiver to marshal or distribute the assets among those who should in the end be determined to be entitled thereto, but only to hold the property until it could be judicially determined whether there was a valid existing ground for the dissolution of the corporation and the annulling of its charter, it is quite evident that, for the purposes suggested, there was no occasion to advertise his appointment, nor for the notification of creditors to present their claims; and the duties and power imposed upon the receiver, such as the running of the road and the incurring of debts, would, it seems to me, be wholly inconsistent with any proceeding looking to a marshaling or distribution of assets before judgment.

There is no statute, in so far as I can discern, which reguVOL. XLIII

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