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Bedell v. The North America Life Insurance Co.

as its representative, being also the trustee for the stockholders and creditors, whose rights he may assert if they have been affected by the fraudulent or illegal acts of the corporation. (Hyde v. Lynde, 4 N. Y. 387; Bell v. Shibly, 33 Barb. 614; Devendorf v. Beardsley, 23 id. 656; Wilson v. Wilson, 1 Barb. Ch. R. 592; Gillet v. Moody, 3 N. Y. 480; Talmadge v. Pell, 7 id. 328; Leavitt v. Yates, 1 Edw. 134; Lincoln v. Fitch, 42 Me. 456; Skip v. Harwood, 3 Atk. 564; In re Colvin, 3 Md. Ch. Dec. 278; Portman v. Mill, 8 L. J. [N. S.] Ch. 161; Delany v. Mansfield, 1 Hogan, 234; 2 Barbour's Chancery Practice, vol. 1, p. 659, 2d ed.; Edwards on Receivers, p. 12, 2d ed.)

A receiver of an insurance company, appointed under the provisions of a statute, is subject to the control of any court in the State which has equitable jurisdiction, in the same way that he was subject to the control of the former Court of Chancery, though not appointed by that court. (In the matter of the Globe Ins. Co., 6 Paige, 102; Holbrook v. The American Fire Ins. Co., id. 220; 2 Rev. Stat. p. 464, § 41.) Where the statute has prescribed a summary mode of closing up the affairs of insolvent corporations without the expense and delay of formal suits to settle and ascertain the claims of creditors, that mode must be pursued; and in such cases suits will not be allowed to be commenced by creditors to ascertain their rights to a distributive share of the fund; but they will be compelled to submit to a reference under the statute. (Per WALWORTH, C., in Globe Ins. Co., supra.)

But this is not such a case. It was an application to the Supreme Court, under the act of 1870, to wind up the affairs of an insolvent life insurance company, and for the appointment of a receiver, and the proceeding in no way affected the rights of the parties in the pending suits. What the effect might be if the Supreme Court of the district in which the receiver has his office had, under the statute (L. 1862, c. 412, and c. 373, pp. 625, 743), appointed a referee, to whom, by the statute, all controversies relating to the receiver's business may be referred, is a matter which it is not necessary now to consider, as there is nothing before me to show that any such

Bedell v. The North America Life Insurance Co.

appointment has been made. The receiver of such a corporation has, by statute, all the powers and authority conferred by law upon trustees to whom the assignment of the estate of an insolvent debtor may be made, and some other peculiar and special powers (2 R. S. 469; Laws of 1858, c. 314, and of 1852, c. 71); but there is nothing in these statutory provisions indicating that suits pending against such a corporation are abated when the receiver is appointed, or which provides any statutory mode for determining such rights as are sought to be enforced in the pending suits; but on the contrary provisions authorizing the court to continue a suit where the corporation has been dissolved (Act of April 26, 1832, § 4, c. 295; 3 Edmonds' General Statutes of N. Y., p. 674).

The fact that there are several such suits in different tribunals, seeking substantially the same relief, is no more a matter of consideration after the receiver has been appointed, than it would have been previously on the part of the corporation, whose representative he has become; and whatever order may be made, or judgments or decrees rendered in these suits, the receiver will have to abide by and submit to as the corporation would have had to. (2 R. S. 464; Holbrook v. The Receiver, &c., 6 Paige, 226; The Guardian Savings Institution v. The Bowling Green Savings Bank, 65 Barb. 275.) Where he has to have the authority of the court before he can origi nate any proceeding, or do certain acts, it may be that he should apply to the court that appointed him for authority or direction; but where an order is made or judgment rendered by a court having equitable jurisdiction of the parties to be affected, a receiver stands in no different position than the parties he represents, and must obey the order or judgment of the court, as they would have been bound to do.

The plaintiff has brought this suit upon the ground that the officers or trustees of the corporation whose receiver Mr. Pierson has become, have conspired with another corporation to deprive its policy-holders of their rights. It is alleged that the corporation is not and never was insolvent; that it is able to carry on its business, and could have carried it on

Bedell v. The North America Life Insurance Co.

but for the collusion of its officers with the Universal Insurance Company; a fact, indeed, which is admitted by the demurrer that has been interposed; and it is alleged in the affidavits that the proceeding by which the receiver was appointed was instituted by the collusive co-operation of the officers of both companies. So far as the receiver is concerned, any collusion on his part is denied by his affidavit, but that denial extends only to himself personally, and even then is not conclusive, for the plaintiff is not shut off from inquiry by the denial in the affilavit. But whatever may be the position of the receiver, I must assume, until the demurrer is disposed of, that there is a good cause of action stated in the complaint, and that the plaintiff is entitled to have the receiver made a party to the action, that she may require him, as the representative of the corporation, to submit to such orders as may be made in the suit, or such judgment as may be rendered, if the court should grant the equitable relief sought.

That there may be a conflict of jurisdiction, as there are several suits pending in different tribunals by different parties for the same kind of relief, though suggested, is not necessarily to be anticipated. The rights of all the parties may be adjusted, and in such cases usually are without any conflict of authority; but if it should arise, the respective tribunals are each subject to the higher authority of the Court of Appeals, which in such a case can be invoked, and its decision will be controlling and conclusive on all parties. As these suits were pending in different tribunals when the receiver was appointed, there was as much ground then as there is now for apprehending a conflict of authority, and it is in no way increased by the appointment of the receiver. So far as it presents any difficulty, it was just as likely to arise under the former equity system, if several suits for the same equitable relief had been brought by different parties before different vice-chancellors. One might have granted the relief sought, and the other denied it; in which case the party considering himself aggrieved could have appealed to the chancellor, who would have determined whether it could

Bedell v. The North America Life Insurance Co.

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be had or not. In the same way, if there should be any conflict between the different tribunals in which the present suits are pending, it can be settled, and settled finally, by an appeal to the Court of Appeals. If the receiver is made a party to these suits, and takes the place of the corporation, he will be enabled in any of the suits to obtain a controlling and final decision upon any question involved, if one tribunal should hold differently from another in respect to the rights of the company, the receiver, or the rights of any of the parties in these suits.

But there is another and more effectual way of avoiding any such conflict of authority. It is recognized in equity that if several suits are brought by different parties relating to the same subject matter, seeking the same relief and requiring the same investigation, the court, to save the fund from being charged with unnecessary expenses, may direct that but one of the suits be tried, and that the parties in the others be allowed to participate. (Cumming v. Slater, 1 Y. & C. Ch. 484; Therry v. Henderson, id. 481; Godfrey v. Maw, id. 485; Turner v. Dorgan, 12 Sim. 504; Pindar v. Smith, Mad. & Geld. 48; Campbell v. Campbell, 2 My. & Cr. 25; Taylor v. Oldham, Jac. 527; Starten v. Bartholomew, 5 Beav. 372; 2 Daniels' Chancery Practice, 995 [960, 961], 1 id. 92, 2d Am. Ed.) If the receiver is made a party in the several suits, he can apply to the courts where those suits are for the entry of an order in each case with the consent of the court, that there shall be a trial of but one of the actions and a stay of proceedings in the others until that cause is carried to a decree. The comity of courts will facilitate any such procedure by which the expenses of the fund will be diminished, whilst the ends of justice will be attained. Usually, priority will be given to the suit which was first brought (Campbell v. Campbell, 2 My. & Cr. 30), unless a subsequent one is more comprehensive or better adapted for ascertaining the rights of all parties, or all the parties agree as to the one to be selected. Upon an application to the court in which the cause is to be tried, an order can be obtained that the parties plaintiffs in the other actions be allowed to attend the

Noe v. Gregory.

trial by counsel, or if they so elect, they can be made parties. (Pindar v. Smith, Mad. & Geld. 48; 2 Daniels' Chancery Practice, 1350 [1305], 2d Am. Ed.; 2 Barbour's Chancery Practice, 477, 2d ed.; Code, § 122; McMahon v. Allen, 12 How. Pr. 39; Davis v. Mayor of N. Y., 6 Duer, 663; State of N. Y. v. Mayor of N. Y., 3 id. 121; Shaver v. Brainard, 29 Barb. 25.)

A motion to make the receiver a party defendant in this suit will therefore be granted, and a like decision will be rendered in the cases of Carlisle v. The Guardian Mutual Life Insurance Company, and Ross and others v. The same; these cases presenting exactly the same question.

ISAAC C. NOE, Respondent, against GEORGE GREGORY, Appellant.

(Decided June 18th, 1877.)

Where a person without authority assumes to make a contract in the name of another, he does not thereby become personally liable on the contract, and the only remedy against him of the person contracted with is by an action for deceit in case he has acted fraudulently, or if there were no fraud therein, by an action for the breach of the warranty of authority.

Whenever a person assumes to act as the agent of another, he impliedly warrants that he has authority to so act.

In an action for such breach of the implied warranty of authority, after it appears that the defendant assumed to act as agent for a third person, the burden of proof is not thereby cast on the defendant to show that he had actual authority to so act, but the burden is upon the plaintiff to show that he did not have such authority.

APPEAL by the defendant from a judgment of the Sixth District Court in the city of New York.

The facts are stated in the opinion.

VAN HOESEN, J.-The complaint is in writing, and is in substance the ordinary quantum meruit count in assump

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