246 F. 820 | 2d Cir. | 1917
(after stating the facts as above). The only question before us is the time at which the value of the security shall be fixed, and so far as we have been able to find that question has been passed upon only in Steinhardt v. National Park Bank, 120 App. Div. 255, 105 N. Y. Supp. 23, where it was held that the time was that at which the creditor sold out the security. With this conclusion we agree. The section fixes two possible ways of realizing the value which must be charged against the claim: The first is by converting the security into cash under the terms of the pledge; the second is “by agreement, arbitration, compromise, or litigation, as the court may direct.” What the creditor in the case at bar asks is that the value of the security shall be fixed in some way other than bv converting it into money according to the terms of the agreement, although he has in fact so converted it. If he is right, conversion can never “determine” the liquidation value, however controlling the amount realized might be as evidence of that value. We think the section could not have more clearly expressed its meaning, that, when the creditor lawfully converts the securities into money, the amount realized should determine the amount to be charged against the face of the claim.
That the creditor may under his agreement lawfully convert the security into cash, so long as the court does not interpose, is settled. Hiscock v. Varick Bank, 206 U. S. 28, 40, 27 Sup. Ct. 681, 51 L. Ed. 945. Usually the court will not interpose, but the creditor may unduly delay exercising his right, or the security may not be salable within any convenient season, so that the exigencies of speedy administration of the estate require a liquidation under one of the four secondary alternatives. This the court could then direct, and wind
Nothing in Sexton v. Dreyfus, 219 U. S. 339, 31 Sup. Ct. 256, 55 L. Ed. 244, looks to the contrary of the views we have expressed, rather the language (219 U. S. on page 345, 31 Sup. Ct. 256, 55 L. Ed. 244) bears them out. That case does, however, fix the termination of interest at the. date of petition filed.
No issue was raised at the bar of any difference under Hiscock v. Varick Bank, supra, between the amount of the debt against the maker and of that against the indorser, and we therefore ignore that question.
The petition is dismissed, and the order affirmed, with costs.
