Matter of People

155 N.E. 916, 244 N.Y. 606, 1927 N.Y. LEXIS 1148

Opinions

Per Curiam.

The order of the Special Term of the Supreme Court directing liquidation of the business of the Second Russian Insurance Company, a foreign corporation, pursuant to provisions of section 63 of the Insurance Law (Cons. Laws, ch. 28), was affirmed by this court under the provisions of subdivision 1-e of that section, which provided for such action when further transaction of business would be hazardous to policyholders, creditors and the public. (243 N. Y. 524.) The order was a final order.

The subsequent order of the Special Term, dated September 25,1926, modifying its previous order of May 22, 1925, is also a final order and reviewable here. (Matter of Board of Education, 169 N. Y. 456.) The modification by the Special Term was to the extent of allowing the plaintiffs in two actions which had been pending against the Second Russian Insurance Company in the Supreme Court to proceed with the trial as if the order of liquidation, May 22, 1925, had not been made. The Appellate Division has reversed this order and denied the modification.

Although the order of modification by the Special Term was a final order, yet it was one which rested in the discretion of the Special Term and the Appellate Division, and we have no power to review discretionary orders.

Even if the appellants were permitted to proceed with their trial and obtain judgment, the procedure to collect it would yet remain to be determined. We have held that after the payment of all domestic creditors, the funds in the hands of the Superintendent of Insurance belong to the creditors and shareholders wherever situated; that if the company is in liquidation at its domicile, the funds must be sent to the home liquidator under proper terms and conditions. Here of course there is no home liquidator, as the Second Russian Insurance Company has ceased to exist as a going concern under Soviet decrees. We do not mean to intimate that the Superintendent of Insurance can hold these surplus funds indefinitely. His duty is defined by the statute, and after the payment of all domestic creditors, he must turn over the funds to the persons entitled to them. We do not attempt at this time to say how this shall be done, nor to suggest what proceedings in equity may be taken to compel a proper distribution of these funds ratably to all creditors, or if none, for their return to the corporation or its stockholders. The appeal for the reasons stated should be dismissed, with costs.