In re Norton

168 A.D. 385, 153 N.Y.S. 798, 1915 N.Y. App. Div. LEXIS 8333

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: May 25, 1915
• Status: Published

Opinion

Putnam, J.:

On the petitioner’s application the court at Special Term devolved upon a referee the power of visitation to be exercised under section 16 of the Membership Corporations Law (Consol. Laws, chap. 35; Laws of 1909, chap. 40) with certain conclusions as to the respective rights in this property and in the income from sales of cemetery lots. The cemetery society and certain of its directors have appealed from each and every part of this order.

Will an appeal lie from such an order, which is not final ? The power of visitation over a corporation originally was administrative and not judicial. Eleemosynary and secular corporations like hospitals and colleges with any abuses of administration could be visited, reformed, redressed and amended by the King himself. In putting forth these corrective powers the chancellor acted for the Crown and not as a court. Thus Kent, C., said: “In respect to charitable institutions the chancellor exercises this power of visitation as the personal representative of the Crown. It appertains to the person who holds the great seal, rather than to the Court of Chancery, as a Court of equity jurisdiction. [Matter of Dann, 9 Vesey, 547.] It may he exercised by a commission issued under the great seal.” (Attorney-General v. Utica Insurance Co., [1817] 2 Johns. Ch. 371, 388.) Although this visitation of corporations may have been derived from that supervision long familiar in the ecclesiastical law, the powers of a visitor under the two systems became very different in their exercise. An ecclesiastical visitor was considered as a quasi court, so that appeals might be taken from his decisions. (2 Phill. Eccl. Law, 1046.) But the determination of a visitor as to a hospital, college or charitable corporation was definitive, as no appeal lay to the King or elsewhere. (Comyn’s Dig. art. “ Visitor,” B; 2 Kent. Com. Will an appeal lie from such an order, which is not final ? The power of visitation over a corporation originally was administrative and not judicial. Eleemosynary and secular corporations like hospitals and colleges with any abuses of administration could be visited, reformed, redressed and amended by the King himself. In putting forth these corrective powers the chancellor acted for the Crown and not as a court. Thus Kent, C., said: “In respect to charitable institutions the chancellor exercises this power of visitation as the personal representative of the Crown. It appertains to the person who holds the great seal, rather than to the Court of Chancery, as a Court of equity jurisdiction. [Matter of Dann, 9 Vesey, 547.] It may he exercised by a commission issued under the great seal.” (Attorney-General v. Utica Insurance Co., [1817] 2 Johns. Ch. 371, 388.) Although this visitation of corporations may have been derived from that supervision long familiar in the ecclesiastical law, the powers of a visitor under the two systems became very different in their exercise. An ecclesiastical visitor was considered as a quasi court, so that appeals might be taken from his decisions. (2 Phill. Eccl. Law, 1046.) But the determination of a visitor as to a hospital, college or charitable corporation was definitive, as no appeal lay to the King or elsewhere. (Comyn’s Dig. art. “ Visitor,” B; 2 Kent. Com. *302.) At the present time in England such a visitor instead of a court is rather an arbitrator, acting under certain directions, and his decision on matters within his jurisdiction is final, and not subject to court review. Even the visitor himself cannot relieve against his own sentence. (4 Halsbury Laws of England, 288.)

In this country visitation is by the government itself through the medium of the courts. (2 Kent Com. [14th ed.] *300.) The New York statute of 1848, to incorporate benevolent, charitable, scientific and missionary societies, declares all institutions so formed subject to visitation and inspection of the justices of the Supreme Court or by any person appointed by the court for that purpose. (Laws of 1848, chap. 319, § 8.) Such visitation was also conferred in other acts for the formation of special kinds of corporations. (Laws of 1865, chap. 368, § 8; Laws of 1875, chap. 267, § 9; Laws of 1875, chap. 343, § 7; Laws of 1888, chap. 293, § 6.) None of these acts gave any right of appeal, so that here, as in England, the sentence of a visitor in the course of his oversight of such a corporation was final. But in 1895 the Commissioners of Statutory Revision, merging these dispersed acts into the Membership Corporations Law (Gen. Laws, chap. 43; Laws of 1895, chap. 559), included institutions not strictly charitable. Visitation was provided by section 16. Upon an account directed to be taken before a referee, the court, after hearing, is to enter a final order determining whether the corporate funds have been misappropriated, from which final order any party aggrieved might, as stated in the statute, appeal to the Appellate Division of the Supreme Court, which was then the General Term of the Supreme Court, and to the Court of Appeals. (Gen. Laws, chap. 43 [Laws of 1895, chap. 559], § 16, as amd. by Laws of 1899, chap. 360; now Consol. Laws, chap. 35 [Laws of 1909, chap. 40], § 16, changing the former General Term to Appellate Division. See, also, Const, art. 6, § 2.)

*

The revisers said their purpose was “ a speedy and inexpensive judicial investigation.” (Rep. Com. Stat. Rev. 1895; Memb. Oorp. Law, 18.) This salutary object might be lost if successive appeals were to lie from the order naming a visitor, or from other orders intermediate the application and the final order. An object of visitation often is to ascertain the corporate property by an inventory checked and sifted by the visitor’s research and probe into the corporate acts (although that is not the special relief here sought), which result might be so obstructed as to be without practical avail if those inside the corporation could hold off the visitor by taking suspensive appeals. In accordance with its purpose to let in light, correct abuses and ascertain a corporation’s true condition, the remedy by visitation has been always summary and not admitting of obstructive procedure. The revisers had this in mind; and even without their expressed words, would be presumed to have preserved the original force of such a protective measure. By granting an appeal from the final order, they surely did not, against their aim and purpose, let in the whole series of intermediate appeals, by which the very thing they sought could be made of little or no avail. (Matter of Commissioner of Public Works, 111 App. Div. 285; affd., 185 N. Y. 391; Code Civ. Proc. § 1361.) While the Appellate Division of the First Department modified an intermediate order for visitation by striking out an injunction as not a legitimate part of such a remedy (Matter of Greene, 153 App. Div. 8), that review did not discuss the question of the appealability of such an interlocutory visitation order, which point does not appear to have been there raised.

The appeal is, therefore, dismissed, with ten dollars costs and disbursements.

Jerks, P. J., Carr, Stapletor and Rich, JJ., concurred.

The parties hereto having stipulated in open court that a justice may be substituted in place of Burr, J., deceased, Mr. Justice Stapletor was so substituted. Appeal dismissed, with ten dollars costs and disbursements.

The act of 1895, passed May 8, to take effect September 1, 1895, referred in terms to the Appellate Division, which did not acquire jurisdiction until January 1, 1896. (Const, art. 6, § 2.)— [Rep.