Opinion
April Term, 1899.
T. Ellett Hodgskin, for the appellant.
Charles C. Deming. for the respondent the Mercantile Trust Company.
David Parry [ Charles L. Kingsley with him on the brief], for the respondent receiver.
In August, 1896, an action was brought by creditors and others, as plaintiffs, against the Kings County Elevated Railway Company, and James Jourdan was appointed receiver of the defendant's property. Subsequently, Mr. Jourdan resigned, and James H. Frothingham was appointed receiver in his place of the property of the defendant company, covered by a mortgage made to the Mercantile Trust Company, as trustee in a suit brought by the trustees to foreclose the mortgage bearing date the 1st day of July, 1885. Prior to the commencement of this action the petitioners had furnished to the defendant company supplies to the value of eighty-five dollars and twenty-seven cents, and in November, 1898, the petitioners asked the court for an order making their claim a lien upon the assets in the hands of the receiver, and directing the immediate payment of the same. The matter was argued at a Special Term of the Supreme Court, and from the order denying the prayer of the petitioners, appeal comes to this court.
The defendant receiver is a mere temporary receiver, having the powers and duties prescribed by section 1788 of the Code. of Civil Procedure. As the court say in the case of Decker v. Gardner ( 124 N.Y. 334, 338): "This particular jurisdiction has been extended to and is frequently exercised upon the foreclosure of mortgages upon railroads, and receivers of such property are charged with the duty of the operation of the road pending the foreclosure suit, to the end that the value of the property, which necessarily depends largely upon the continuance of its business, may not be depreciated, and also to the end that its income may not be diverted to the payment and satisfaction of debts which are not liens upon the property. * * * They do not represent the corporation in its individual or personal character, nor supersede it in the exercise of its corporate powers, except so far as the mortgaged property is concerned." There is nothing in the order appointing the receiver which authorizes him to pay any of the debts of the corporation, and, as is aptly said in the case of Franklin Trust Co. v. N.A.R.R. Co. ( 11 App. Div. 249, 257), "Even though he is, for the purpose of such preservation, required to continue its operation, he is not thereby invested with any power or duty to ascertain who are its creditors, and to provide for their payment." The case of The Metropolitan Trust Co. v. T.V. C.R.R. Co. ( 103 N.Y. 245) seems to be an authority for the conclusion reached by the court below.
A different question would be presented if it appeared that the payment of this claim was essential to enable the receiver to continue the operation of the road, as might be the case if it were a claim for wages of persons now in the employ of the receiver, or for other necessary current expenses, which might bring it within the principle laid down in Farmers' Loan Trust Co. v. Bankers Merchants' Tel. Co. ( 148 N.Y. 315). (See, also, Guarantee Trust Co. v. Phila., Reading New England R.R. Co. 31 App. Div. 511.)
We conclude that the order appealed from should be affirmed, with costs.
All concurred, except GOODRICH, P.J., not voting.
Order affirmed, with ten dollars costs and disbursements.