1. Complainant is receiver in insolvency of a domestic insurance company in which the deceased bus operator was insured against loss or damage occasioned by his negligent operation of his vehicles. Pursuant to a decree of the court of chancery in the receivership administration suit, complainant levied an assessment against all policy holders, including the deceased, to raise a fund to pay the losses and expenses of the defunct insurance company. Despite written demand for payment, the levy was never paid. After insured's decease, complainant duly presented his assessment claim to his administratrix, and she did not dispute or question its validity until after the filing of this suit. Deceased died possessed of a bus purchased for $3,266, a franchise to operate same worth upwards of $1,000, cash deposits of $175, and certain questionable equities in encumbered real estate. His wife qualified as administratrix and alleged the assets of the estate were worth only $75. She never filed an inventory. Thereafter she conveyed the bus and franchise to a dummy corporation organized by her and paid for out of the assets of the estate, the capital stock being held by the administratrix, her mother and sister, who were also officers and directors. None of them paid any consideration for the stock. The conveyance to the corporation was made without any consideration and rendered the state insolvent. The administratrix filed an accounting with the orphans court, not yet allowed, wherein she concealed the assets and income of the estate, and claimed disbursements which she had never made. On complainant's bill praying that the administratrix make discovery and account to the chancery court, that it be decreed that the defendant corporation holds its assets in trust for the decedent's estate and that appropriate incidental relief be granted, including an injunction and the appointment of a receiver pendente lite, held, injunction properly granted and receiver appointed.
2. Defendants' answering affidavits do not controvert the material factual allegations of the bill and are largely argumentative, parts of them being based on hearsay and belief. Where, as here, the defendants' answering affidavits do not meet the complainant's proofs, and it appears probable that complainant will prevail on final hearing, a preliminary injunction may issue and a receiver pendente lite will be appointed.
3. Equity has jurisdiction to compel an administratrix to settle her account, for discovery of assets, and for other equitable relief, even though the orphans court has entertained an account, where special circumstances are shown.
4. The bill in this case established abundant justification for intervention by the chancery court. Under the facts set out, it is not only the right but the duty of chancery to take over the accounting from the orphans court. The causes for complaint involve questions which can only be settled by a court of equity, and which should be settled before any satisfactory accounting could be completed.
5. The chancery court refused to stay the injunction and receivership pending appeal. The granting of such a stay would necessarily have defeated the whole aim and object of the suit and left the court with nothing on which to act in case of an affirmance. The refusal was, therefore, proper.
PER CURIAM.
The facts in this case sufficiently appear in the opinion below. The appeal is from two orders: one, appointing a temporary receiver to operate and control the bus corporation as in effect the principal asset of the estate of George C. Wunschel, deceased; restraining the individual defendants from disposing of or encumbering the stock in said corporation standing in their names; and from collecting dividends thereon; restraining the corporation from disposing of or encumbering its property (principally a bus, and a local franchise to operate it); appointing a temporary receiver to conduct the bus business; and taking over into the court of chancery the accounting of the estate of deceased Wunschel. The second order refused a stay of the injunction and receivership.
The suit is in effect one by a creditor of a deceased debtor to prevent a fraudulent disposition of the estate in order to avoid payment of the complainant's claim. We concur in the finding of the vice-chancellor that the fraudulent conduct he recites was amply proved, and consider that the relief awarded pendente lite was properly so awarded.
As to taking over the accounting of the estate on grounds of fraud, it is sufficient to cite Filley v. Van Dyke, supra, relied on in part by the vice-chancellor.
As to the denial of a stay pending appeal, it should be obvious that the granting of such a stay would necessarily have defeated the whole aim and object of the suit, and have left the court with nothing on which to act in case of an affirmance.
The orders under review are affirmed.
For affirmance — THE CHIEF-JUSTICE, TRENCHARD, PARKER, LLOYD, CASE, BODINE, DONGES, HEHER, PERSKIE, HETFIELD, DEAR, WELLS, WOLFSKEIL, RAFFERTY, WALKER, JJ. 15.
For reversal — None.