Advance Beneficial Order's Assigned Estate

48 Pa. Super. 197 | Pa. Super. Ct. | 1911

Opinion by

Porter, J.,

The parties having entered into an agreement in writing, which was submitted as a case stated in the court below and appears in this report, it is unnecessary to recite the facts in this opinion. The opinion of the learned judge of the court below, which will also appear in the report of this case, fully vindicates the conclusion at which he arrived. When the Advance Beneficial Order became insolvent,, made an assignment of its property for the benefit of creditors and was dissolved, the property in the hands of the assignee and which subsequently passed to the receiver appointed by the court below was affected with a trust, primarily for the creditors of the corporation and subject to their rights, and secondarily, for the members of the order in proportion to their interest therein: Com. exrel. v. Order of Solon, 192 Pa. 498; 2 Story’s Equity Jurisprudence, 603. And the right of each holder of a certificate of membership in the association to participate in the distribution of the assets became vested at the date of the assignment, when the property passed under the jurisdiction of the court for distribution: Hibernia Fire Engine Co. v. Com. ex rel., 93 Pa. 264. All creditors of the Advance Beneficial Order, other than the holders of certificates of membership, had been paid in full out of the balance remaining in the hands of the assignee at the first account, and the auditor at that time had awarded a dividend of twenty per cent to 4,808 certificate holders, members of the order, who then proved their claims before him, and the report of the auditor was confirmed by the court and the dividend paid to all those holders of certificates of membership.

The court, in 1899, dismissed the assignee and appointed a receiver to take charge of the estate. The entire fund realized from the settlement of the estate, subsequently to the first distribution, which fund the court was called upon to distribute, was sufficient to pay ten per cent upon the claims of the entire 4,808 certificate holders. A second audit was had at which the holders of certificates of membership were required to present and prove their claims anew and to such as did so a dividend of ten per cent upon their claims was awarded and paid. A further opportunity was given certificate holders to prove their claims anew in open court and a number of such claimants there appeared, proved their claims and were awarded and paid the dividend of ten per cent. The holders of 2,886 certificates of membership have thus proved their claims anew and been paid the second dividend. It is distinctly agreed upon in the case stated that a large number of the actual original holders of certificates of membership, who had duly appeared and proved their claims at the first audit failed to appear at the second audit, thus: “1,940 of the original 4,808 certificate holders (a list of whose names and the amounts paid by each were set forth in the receiver’s report) failed to appear at the second audit and prove their claims anew and receive the second dividend of 10%.” Eighteen of the certificate holders who had failed to appear before the auditor subsequently appeared and proved their claims in open court and were awarded and paid a dividend, thus reducing the number of holders of certificates of membership who failed to’formally present their claims, at the second audit, to 1,922, all of whom had duly appeared and proved their claims at the first audit. “The said 1,922 certificate holders whose names are set forth on the records of the court have been unknown for the space of seven years, and the amount of the fund, if any, .payable to them is sought to be recovered by the Commonwealth of Pennsylvania by the said deputy es-cheator.” The fund in court is sufficient to pay to the certificate holders who did not appear at the second audit a dividend of ten per cent, thus placing them upon the same footing with the other holders of certificates. The appellant does not contend that the escheator is not entitled to take the money in case the certificate holders who did not appear at the second audit would have been entitled to take it if they had so appeared. His contention is that the certificate holders who have not appeared and reproved their claims at the second audit would not be entitled to this fund, under the facts agreed upon in the case stated.

The appellant relies to sustain his contention upon two orders, or supposed orders, made by the court in dealing with the estate of this insolvent corporation. The first is the concluding sentence in the opinion of Judge Arnold, quoted in the case stated: “Then we will refer the matter to an auditor to take proof of the claims against the order and dividends will be awarded only to those who present and prove their claims.” This cannot in strictness be said to be an order of the court, it can only be construed as an expression of an opinion as to the course which would be advisable for the court to pursue in the future. The second order of the court upon which the appellant relies is embraced in the decree of March 1, 1907, quoted in the case stated, in these words: “And that with the exception of the persons falling within the said classes (a) (b), all parties claiming against the estate of the said Advance Beneficial Order, remaining in the hands of the receiver who shall’fail to present and prove their claims in open court at the time fixed by this order, shall be forever barred from participation in the distribution of the said fund.” The classes thus excepted were, (a) certificate holders who had proved their claims anew at the second audit and (b) certificate holders who had presented their certificates or other proofs to the receiver, subsequently to June 7, 1901. The time fixed, at which certificate holders were to present their claims in open court,'was April 22, 1907. On April 22, 1907, eighteen certificate holders made proof of their claims in open court and the court awarded to them the second dividend of ten per cent, which was paid.

The court having jurisdiction to distribute the fund in question had never made a decree awarding the fund to the appellant, nor had it made any decree which was final prior to that from which the appellant appeals. That part of the decree of March 1, 1907, which required persons claiming against the estate of the order to present their claims on April 22, 1907, was not a final decree; it vested title to the fund in no person. The fund remained absolutely subject to the control and disposition of the court. The order requiring persons to appear at a certain time in the future or be barred was interlocutory only, made for the purpose of enabling the court to arrive at a stage in the proceedings when it could make a final decree. It was such an order as the court was perfectly free to disregard, before a final decree was reached, in case the interests of justice so required. Had any of the certificate holders who failed to appear at the second audit appeared and presented proper proofs after the expiration of- the time allowed by that order of court, but before a final decree had been reached, it would have been the duty of the court to receive and consider those proofs. The facts agreed upon disclose that the fund was retained by the court awaiting the production of evidence as to who were the parties legally entitled to receive it.

The creditors all having been paid, the fund was the property of the certificate holders. The agreement in the case stated upon the fact that the 1,922 persons, who had received the first dividend but had not received the second, were original holders of certificates, established the right, at least as against this appellant and those whom he represents, of those 1,922 persons to receive the dividend in question. We are not called upon in this case to determine any question between the commonwealth and the 1,922 persons who were entitled to the dividend. The admission of the appellant, in the case stated, that the 1,922 persons, in question, were certificate holders, determined that this appellant had no right to that fund, and he has no standing to complain of the action of the court below.

The decree of the court below is affirmed and the appeal dismissed at the cost of the appellant.