In re E. S. Greeley & Co.

70 Conn. 494 | Conn. | 1898

Andrews, C. J.

In the case of the Waddell-Entz Co. Receivership, 67 Conn. 324, 337, this court said: “ The insolvent act of 1853 contained a provision (now found m § 590 of the General Statutes) requirmg a secured creditor who presented Ms claim against the estate, to elect between the surrender of such security, and a dividend from such estate only upon the excess of such claim above the value of,such security. In Mechanics’ and Farmers’ Bank, Appeal from Probate, 31 Conn. 63, 70, it was held that this statute placed all the property of the insolvent in the custody of the law to he disposed of according to law; that the creditor has no vested interest in such property; and that the statute was ‘strictly remedial, providing for the appropriation of the debtor’s property, on principles of equity and justice among all his creditors.’ The provision in relation to secured creditors was extended to insolvent estates of deceased persons; so that the equitable rule applied to the distribution by law of all insolvent estate, including insolvent corporations. In 1869 a law was passed for the winding up of corporations, and under that law the property of the insolvent corporation could be taken possession of for division among all creditors in equal proportions, by a receiver appointed by the Superior Court as a court of equity, as well as by a trustee appointed by the Court of Probate under the insolvent Act. New Haven Wire Co. Cases, 57 Conn. 352, 387. The present proceeding is brought under this Act, which is still in force substantially unchanged. General Statutes, § 1942. The Act confers on the court full equity powers to make such orders as to the doings of the receiver ‘ and as to the payment of debts and distribution of the effects of said corporation, as maybe just and conformable to law.’ We think the property of an insolvent corporation is in the custody of the law to the same extent and for the same purposes, when transferred to a receiver under § 1942, as when transferred to a trustee under the insolvent Act, and that the principle of the rule in respect to the participation of secured creditors in the distribution of such property, which is obligatory in the latter case, ought to be applied in the former. This is just and required by the insolvent Act.”

The rule so laid down governs the present case. It appears by the finding that the receiver recovered judgment in Pennsylvania on the 10th day of February for more than $2,000 against the Electrical Supply and Construction Company, and that of that amount more than $1,000 was paid to the receiver prior to the 1st day of March, 1897. On the last mentioned day the Cable Company—the present claimant— brought its action in Pennsylvania against the Greeley Company upon the same claim which it now asks to have allowed by the receiver, and. garnisheed the unpaid balance of the said judgment. The action so brought has since gone into judgment, but at what date is not mentioned. The claimant company has at all times refused and still refuses to release its said garnishee attachment. Since the judgment in the garnishee suit the Supply and Construction Company has itself gone into the hands of a receiver. It has paid nothing to the Cable Company and it is uncertain now how much, if anything, can be recovered from it. The fact that the Supply Company had paid to the receiver more than half of the judgment he had recovered, would seem to indicate that at the time the garnishee suit was brought the judgment was worth its full face amount. Ho reason is given, or suggested, why the balance of the judgment in favor of the Greeley Company would not have been paid to its receiver by the Supply Company, or could not then have been collected in full, other than the said attachment. That balance- at that time amounted to more than the claimant’s whole demand. Its refusal at all times to release its attachment deprives it, we think, of all equity to have its claim allowed; and the receiver properly disallowed the claim.

In the argument in this court the Cable Company claimed that it ought to be allowed to go back into the Superior Court, prove the .value of its judgment against the Supply Company, and have the excess of its present claim, if any, over and above such value, allowed by the receiver. As the record does not show that any such claim or offer was made in the Superior Court, we are not at liberty to consider it.

There is no error.

In this opinion the other judges concurred.