122 N.Y.S. 664 | N.Y. App. Div. | 1910
The petitioners are sufferers from an unfortunate investment of their moneys by a former chamberlain in mortgages which, upon foreclosure, resulted in a large deficiency.
Their respective losses appear to have been as follows! MavxlieU
They ask to have their losses made up to them out of a fund in the hands of the chamberlain known as the general fund of the Supreme Court, • ' .
It appears from a table annexed to the report Of the referee that there have been in the course of years a considerable number of such losses, their aggregate, including interest compounded annually at four per cent down to January 1, 1908, being. $135,794.46. If any of these losses are paid, they should all be paid.so far forth as the available funds, if any, will permit.
Of the petitioners’ money the sum of $64,000. was invested in a mortgage made by one Margaret O’Sullivan. Upon foreclosure the property mortgaged was bought in by the chamberlain and súbse- . quently resold by him at a total-profit of $502.28, amounting at the. date of the referee’s report, with interest, to. $726.06, which sum now stands credited to a special account known as the “ Márgáret O’Sullivan Mortgage Account.” There can be no doubt that the petitioners are entitled to have'this sum paid to them in the proportions in which their moneys were invested in said mortgage, to wit, Maxwell Stevenson, thirty-nine and orie-foiirth per cent-; Eloise Kernochan, thirty-four and one-half per cent; and Paul E. Stevneson, twenty-six and. one-quarter per cent,
• The fund from ■ which the petitioners seek reimbursement is known officially as the “ General Fund of the Supreme Court, - Appellate Division for the First Department.”
It was created under an order , of this court, dated January 6, 1905, by the consolidation of four separate funds or accounts which had been kept by the chamberlain. ■
The, titles by which said funds were known, and the amounts standing to the credit of each when the consolidation took place, were as follows:'
General Fund of the Supreme Court.. . 1'... $10,564 68
Surplus'Balance Account.,.............. 6, 922 65
Interest Account............... ....... 20, 975 49
Contingent Account .................... 5, 518 79
Total...........,........... $43, 981.61
On December 22, 18.65, the General Term of the Supreme Court made an order directing the chamberlain to transfer to the general fund the difference between simple and compound interest on sums deposited with the Hew York Life Insurance and Trust Company, and in the future to transfer to said fund, annually, interest on interest. Pursuant to this order there was transferred on December 31, 1865, to the general fund from thirty different accounts the sum of $6,913.10. Subsequently other sums were transferred, the total amount of the transfers down to December 29, 1879, being $16,576.26, and numerous payments were made from it, aggregating $11,635.12- Interest upon this fund was credited to it down to December 31, 1884, amounting to $5,605.95. After that date • whatever interest was earned on the fund was credited to the surplus interest account., Its amount, as the referee finds, was $5,881.26. It appears that this fund consisted wholly of interest taken from thirty specified and known accounts, and is, therefore, traceable and in fact has been traced to its sources.
All parties agree that so much of this fund as remains should be returned pro rata to such sources in proportion to the amounts transferred to make up the fund. This amount is, therefore, concededly not available to make good the petitioners’ losses.
The “ Surplus Balance Account ” was made up of small balances of undistributed interest on' surplus moneys, taken from a grea.t number of accounts. It commenced on December 31, 1890, with a credit of $6,918.49, which was increased on December 17, 1892, to $6,922.65. Whatever interest accrued on this sum down to January 6, 1905 (the date of consolidation of the funds), was credited to' the Surplus Interest Account. The referee, estimates it ■ at $2,394.36. '
The accounts from which the fund was made up have been traced and identified. So much of the fund is, therefore, return
All parties concede this. The petitioners cannot, therefore, be reimbursed-out of this fund.
The Surplus Interest Account, amounting at the time of consolidation to $20,975.49, was made up, in the words of the referee, “ in one way or another, entirely from accumulations of interest on various funds which had been deposited with the Chamberlain in trust,” in the manner set forth in detail in the referee’s report. All of the expert witnesses testified that it would be impracticable to trace the various accounts from which this interest was taken.
As has already been said, however, interest earned on the General iFund of the Supreme Court, estimated at $5,881.26, and interest earned on the Surplus Balance Account, estimated at $2,394.36, were credited to this “ Surplus Interest Account.” ' This interest should be returned to the respective funds upon which it was earned. The remainder of the fund is absolutely untraceable, and if no payments are authorized to be made out of it,-will go on accumulating until eternity.
The Contingent Account, amounting at the time of consolidation to $5,518.79, was opened on December 23, 1848, and has been credited from time to time with small unclaimed balances of various kinds. It has been as low as $18.61, in 1882, and as' large as $42,735.26, in 1885.' It has been used, as its title indicates, as a contingent account, from which all sorts of payments have been made,' including sums to make good losses oii mortgage investments.
The expert witnesses all agree that it is impossible to tracé the .sources of this fund, so that it can be redistributed, and it is made perfectly manifest by the referee’s report, and the évidence taken by him, that neither of the last two mentioned funds can be traced back to their original sources, except as to certain items of interest above referred to, and that' it is impossible tó credit them back to any accounts so that any person can ever establish a claim to any part of them. They are emphatically “ dead ” funds, which will go on accumulating forever if left undisturbed. There being no known or ascertainable cestui que trust who can make claim upon them, these funds cannot properly be called trust funds. (Matter
It is contended on behalf of the State Treasurer that the present entire Consolidated Fund should be paid over to him under the provisions of section 9 of chapter 651 of the Laws of 1892 (now State Finance Law [Consol. Laws, chap. 56; Laws of 1909, chap, 58], § 44). That contention seems to be well founded as to so much of the -fund as was taken from and is to be returned to the General Fund of the Supreme Court and the Surplus Balance Account to which there are known or ascertainable claimants. That act applies only, however, to moneys paid into court, which have remained in the hands of any county .treasurer, or of the chamberlain of the city of Hew York, for twenty years, and to which there are or may be known or ascertainable claimants, and does not. apply to funds like the Interest Account and the Contingent Account to which, as has been said, there are no such claimants.
It is now some time since the referee’s report was signed and his computations of interest are not carried down later than January 1,
From this fund will be paid to the petitioners, and to others similarly situated, such proportion of their losses, as may, upon'the coming in of the report, appear to be reasonable, dne regard being had to reserving in said fund a sum which may be applied hereafter to proper purposes. The counsel who appeared before the referee
Present — Ingraham, P. J., McLaughlin, Clarke, Scott and Dowling, JJ.
. Motion granted to the extent stated in opinion, and the matter referred back to referee. Settle order on notice.
