253 N.W. 757 | N.D. | 1934
Lead Opinion
In May, 1931, the Wheat Growers Warehouse Company, a corporation, appeared before the Board of Railroad Commissioners and presented a petition for the appointment of said Board of Railroad Commissioners as trustee for the said Wheat Growers Warehouse Company, under chapter
An order appointing the Board of Railroad Commissioners as trustee was duly made and the said Wheat Growers Warehouse Company turned over to the trustee all of the grain stored in its numerous warehouses. An action was brought by the trustee against the Wheat Growers Warehouse Company and the Maryland Casualty Company on the bond for a shortage in the warehouse at Burleigh, Burleigh county, North Dakota. A judgment was secured and affirmed by this court for the amount of the shortage at that place. State ex rel. Larkin v. Wheat Growers' Warehouse Co.
In marshaling the assets, under § 5 of chapter
Some of the general creditors of the Wheat Growers Warehouse Company also filed claims. The trial court did not pass upon the claims of the general creditors but did hold that the claims of the Maryland Casualty Company and the Hartford Accident and Indemnity Company were not superior to the claims of the general creditors and from such order the Maryland Casualty Company and the Hartford Accident and Indemnity Company appeal.
There is just one question involved and that is, who is entitled to this fund, after the redemption of all the warehouse receipts? Section 10 of chapter
In May, 1931, the Wheat Growers Warehouse Company could not sell, or dispose of, the large amount of grain that it had in its elevators. Its representatives went voluntarily to the Board of Railroad Commissioners, presented a petition to have the said Railroad Commissioners appointed as trustees. The Railroad Commissioners were appointed and the Wheat Growers filed an answer praying for its appointment, and turned over to the trustee all of the grain that it had in all of the elevators for the purpose of selling said grain and redeeming *495 the warehouse receipts and sale tickets. It was liable, as principal, for the payment of said receipts and sale tickets and the surety companies would only be liable for any balance necessary for the redemption of storage receipts and sale tickets after the proceeds from the sale of grain was exhausted. That was all that the trustee needed to collect from the surety companies, but it collected more than was necessary and it follows that the surplus belongs to the surety companies. Suppose they had collected the full amount of the bond from the surety companies and that there was a two hundred thousand dollar surplus. Could the general creditors come in and say they were entitled to that, or their proportionate share? Certainly not. That would be an overpayment and that is what happened in the instant case. More was demanded and received of the surety companies than they should have been required to pay. At the hearing on the report of the trustee, and before any of the money was paid, the representatives of the surety companies were present, insisting that the surplus belonged to the surety companies and demanding the proportionate share of each.
Section 6688, Compiled Laws 1913, reads as follows: "Whenever property of a surety is hypothecated with the property of the principal, the surety is entitled to have the property of the principal first applied to the discharge of the obligation." In the instant case the surety companies were entitled to have the property of the principal, upon the bond, exhausted first in the redemption of the storage receipts and sale tickets. The property of the principal was turned over for that purpose and the surplus belongs to the surety companies.
It is ordered that out of this surplus there be paid to the Maryland Casualty Company $9,200.21 and to the Hartford Accident and Indemnity Company $5,300.56.
CHRISTIANSON and MOELLRING, JJ., concur.
Concurrence Opinion
I concur in the result. Under the obligations of the bonds involved the surety companies are liable for the deficit on outstanding storage tickets in each elevator bonded, and up to the amount for which each elevator was bonded, irrespective of the fact there may have been a surplus in other elevators involved. The companies could have waited until the amount of the shortage in each elevator *496 was computed, and then have paid such shortage. But having paid to the Board of Railroad Commissioners, on demand and largely as an accommodation the amount demanded, and in excess of the shortage, they are entitled to a repayment of the amount overpaid. They are also entitled to be subrogated to the rights of the holders of the storage tickets in the assets of those elevators for which the bonds were paid.
I express no opinion as to the relative rights of the surety companies and other general creditors in the assets of the elevators in which there was no shortage on outstanding storage tickets.
Addendum
I am unable to agree with the full holding (as I understand it) of the majority opinion in this case. I do agree that the defendants are subrogated to all the rights of the holders of those storage receipts paid and discharged by them. My disagreement is with the holding respecting the rights of the ticket holders as expressly or impliedly defined in the majority opinion. It seems to me that the statutes considered and interpreted, contemplate that each warehouse operated as a unit shall be considered independently of all other warehouses owned and operated by the concern to which it belongs. It seems to me that this is the proposition for which the State contended in State ex rel. Larkin v. Wheat Growers' Warehouse Co.
With respect to the matter of expenses of administration and interest on claims during the time when payment thereof is delayed, it seems to me that likewise each warehouse must stand separately and be liquidated separately. If a general expense is incurred some means must be devised whereby it can be allocated. If the grain in any particular warehouse is sufficient to discharge all storage receipts issued by that warehouse and cover all expenses attendant on the liquidation, then, well and good. Any excess above such requirements is subject to the claims of general creditors. The bond, so far as that particular warehouse is concerned, is discharged. If there is a deficiency the bond in the amount that it covers that particular warehouse is charged and to that extent the bonding company has a claim as a general creditor against the warehouseman. But a storage ticket holder has no preferred claim as against the other assets of the warehouseman. So the bonding company that has redeemed his tickets can have none.