Opinion
Argued October 20, 1885
Decided October 30, 1885
William Barnes for appellant. N.C. Moak for respondent.
Edward Newcomb was appointed receiver of the Atlantic Mutual Life Insurance Company on the 6th day of August, 1877, under chapter 902 of the Laws of 1869. At and prior to that date the company owned certain real estate which was subject to a mortgage given by a prior owner thereof. Immediately after his appointment the receiver took possession of the property of the company, including the real estate. On the 25th day of June, 1880, William Barnes, the appellant, recovered a judgment against the company, which was docketed in Albany county. On the 7th day of October, 1881, the receiver, pursuant to an order of the Supreme Court, sold the real estate to Barclay Jermain, for $10,400, subject to the prior mortgage. Some question having been made as to the receiver's title, that sale was rescinded, and an agreement made between Jermain and the receiver that upon a foreclosure sale under the mortgage Jermain would bid for the real estate the amount due upon the mortgage, together with the costs of the foreclosure, and that he would pay the receiver the balance up to $31,010.54, the sum which he had agreed to pay, including the mortgage upon the prior sale. At the foreclosure sale, Jermain, in pursuance of this agreement, bid the amount due upon the mortgage and the costs, and paid over to the receiver, in addition thereto, upwards of $9,000. Thereafter, Barnes claiming that that sum was a surplus realized upon the foreclosure sale, made this motion to have his judgment paid out of the same on the ground that it was a lien upon the real estate subject to the mortgage, and prior and superior to the title of the receiver.
As appears by the opinion of the General Term, it was there held that the fund which Barnes claimed to have applied on his judgment was not strictly surplus money arising upon the foreclosure sale, and upon that ground the court denied his claim. We might rest our decision here upon the same ground. But there is another ground still more radical and satisfactory. The receiver, upon his appointment, became vested with the title to all the property of the company, including its real estate. Section 7 of the act of 1869 authorized the court to appoint "a receiver of all the assets and credits" of the company, and provided that the receiver, upon filing his bond, shall "take possession of all the assets and credits" of the company. The word "assets," where it is used in the several sections of that act, manifestly means all the property, real and personal, of any company coming under its provisions. No provision is made in the act for any formal conveyance to the receiver, and it cannot be supposed to have been the intention of the legislature to leave the title to its real estate in the insolvent company subject to the risks of judgment liens or other complications. The purposes of the act require that such title should at once vest in the receiver, and we think the act should receive such a construction as to effectuate such purpose. It is not a general rule that a receiver can only take title from an insolvent person or corporation by a formal conveyance. The general rule is otherwise, as in the case of receivers appointed in supplementary proceedings, and receivers and assignees appointed in bankrupt proceedings, and in nearly all cases of the appointment of receivers of insolvent corporations. The title of receivers in such cases to real and personal property, both in this country and in England, is generally statutory, and not under any formal conveyance. But even if we are wrong in this, prior to the recovery of the judgment by Barnes, the receiver had the equitable title and the possession of the real estate. All the title, if any, which remained in the corporation was merely formal, and was held by it in trust for the receiver, which it could be compelled by the court at any time to convey to the receiver. The receiver's title was, therefore, superior to and older than the lien of the judgment.
It is, therefore, clear that the order of the General Term is right, and should be affirmed, with costs.
All concur.
Order affirmed.