257 F. 591 | W.D.N.Y. | 1919
On June 2, 1913, the Bank of Avoca discounted a promissory note for $3,500, payable three months after date, given by the Shortsville Wheel Company to the Avoca Wheel Company. At maturity a partial payment was made and a renewal note given. On September 2, 1914, there was due on the indebtedness $3,045.74, and the Shortsville Wheel Company then gave a renewal note, payable in three months and indorsed by the Avoca Wheel Company, to secure the debt. Meanwhile receivers were appointed for the Shortsville Wheel Company, with whom claims were thereafter filed on the indebtedness in question. Payment of a dividend on the debt was refused by the receivers, because of the existence of an agreement between the Avoca Wheel Company, the indorser of the original and renewal notes, and the Shortsville Wheel Company, the maker, that each should pay one-half of the original indebtedness when it became due, of which the Bank of Avoca was aware, and in consequence of which it could not legally collect a dividend on the
Whatever rights eventuated to the receivers from the agreement are believed to be enforceable by action against the Avoca Wheel Company for contribution. It follows that the receivers are required to pay full dividends to the Bank of Avoca, with interest on dividends withheld, together with the fees of the special master.
So ordered.