APPEAL by Joseph B. Mayer from so much of an order of the Supreme Court, made at the Albany Special Term and entered in the office of the clerk of the county of Albany on the 17th day of March, 1911, as surcharges his accounts as receiver of the Bank of Staten Island, and fixes his commissions at the rate of two and one-half per centum on the amounts received and disbursed.
Joseph B. Mayer was appointed the receiver of the Bank of Staten Island January 23, 1904, by a judgment in an action brought in the Supreme Court to dissolve the corporation for insolvency. He continued as receiver until June 29, 1906, when he resigned and his successor, John S. Davenport, was appointed. He presented his accounts as such receiver and a referee was appointed to take, state and settle the accounts. Upon the hearing before the referee it was stipulated as facts, for the purposes of the proceeding, that at the time of the entry of the decree of dissolution and the appointment of Joseph B. Mayer as permanent receiver, one Howell H. Barnes, then a stockholder in the said Staten Island Bank, held certificates of stock for 100 shares; that the par value of the stock was $5,000; that the said Howell H. Barnes was solvent and remained solvent and able to respond to any judgment that might have been recovered against him in an action to recover upon a stockholder's liability for the period of two years thereafter, and that no stockholders' action was brought against him under the statute.
The referee found that there had been no willful neglect on the part of the appellant and refused to surcharge his account with the amount recoverable from the stockholder.
Upon the motion to confirm the report of the referee an order was made surcharging the account of the receiver 'with said amount of five thousand dollars, the stockholders' liability of Howell H. Barnes to said bank.'
Samuel F. Moran, William F. Sheehan and John W. Searing, for the appellant.
Nathan D. Stern, for the respondent receiver.
Thomas Carmody, Attorney-General, and Irving D. Vann, for the respondent, The People of the State of New York.
The determination of the Special Term is based upon the theory that it was the plain duty of the receiver to bring an action or proceeding to enforce the liability of the stockholder before the Statute of Limitations attached, and that his failure to prosecute was such an omission of duty that he should be held personally liable as for a devastavit. I do not so understand the law. Prior to the amendment of section 52 of the Banking Law of 1892 (Gen. Laws, chap. 37; Laws of 1892, chap. 689) by chapter 441 of the Laws of 1897, there was no statutory provision authorizing receivers to enforce the individual liability of stockholders, and it was held that the appropriate remedy was by a suit in equity by a creditor for himself and on behalf of those who chose to come in and share in the benefits and expenses of the litigation.
The amendment, so far as material upon the question under consideration, provided that 'Except as prescribed in the Stock Corporation Law, the stockholders of every such corporation shall be individually responsible, equally and ratably, and not one for another, for all contracts, debts and engagements of such corporation to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares. In case any such corporation shall have been or shall be dissolved by final order or judgment of a court having jurisdiction, and a permanent receiver or receivers of the said corporation shall have been or shall be appointed, all actions or proceedings to enforce the liability of stockholders under this section shall be taken and prosecuted only in the name and in behalf of such receiver or receivers, unless such receiver or receivers shall refuse to take such action or proceeding upon proper request in that behalf made by any creditor, and in that event such action or proceeding may be taken by any creditor of the corporation.'
This provision was re-enacted and ...