75 N.Y.S. 563 | N.Y. App. Div. | 1902
Lead Opinion
The several matters requiring consideration in this case are brought up-by appeal from an order made at the-Special Term sus
Among the preferred creditors are the Onondaga County Savings Bank, the Monroe County Savings Bank, the Union Dime Savings Institution and the Farmers and Mechanics’ Savings Bank. These several institutions with other preferred creditors have been paid by the receiver the full amount of the principal of their respective claims upon the dissolved corporation. Those claims .were for moneys on deposit with that corporation and under agreements by which interest ■ at varying rates was to be paid upon such deposits. On the 21st day of July, 1891, a dividend of thirty-five per cent was paid to the preferred creditors on the principal of their claims ; on July 13, 1892, another payment of thirty-five per cent was made to them in the same way ; on June 21, 1893, another dividend of twenty per cent was paid them, and on the 2d of July, 1894, a fourth dividend of ten per cent was paid. Each of these several dividends was receipted for as a dividend on the principal amount of the claims of these preferred creditors. The receipt for the fourth and final dividend recited that it was on and completed the payment of the principal of the claim of the creditor receiving it as a preferred creditor of the trust company. The referee in his report allowed these savings institutions and their preferred creditors interest upon their claims. They had insisted before him that they were entitled to legal interest down to the time of the payment of the first dividend, and that such payments should be treated as being first on account of interest and then the balance applied to the payment of the principal and so on with the three other dividends. The referee did not adopt that contention, but reported that the preferred creditors were entitled to interest upon the :prin
First. An examination of the evidence respecting the services rendered by Mr. Hawes shows that the summary of the facts in relation thereto, made by the referee in his report, is an accurate statement of all that Mr. Hawes did under his employment. Prom those facts no other conclusion was permissible than that reached by the referee. The claim to a preference for these services must stand upon the right to a statutory lien, or the right to a common-law lien .as distinguished from a statutory lien, or upon equitable considerations indicating that a fund from which payment is preferentially demanded was either created in whole or in part, or preserved by the services of the attorney who makes a specific claim upon that fund. The $8,000 item is for services rendered by Mr. Hawes as the regular attorney and counsel of the American Loan and Trust Company. That corporation was a trustee under a mortgage made to secure bonds of the Decatur, Chespeake and N ew Orleans Railway Company. The American Loan and Trust Company held in its own right some $400,000 at par value of those bonds and about the same amount of its stock. These securities were held as collateral to a loan made by the trust company to the railway company of about $310,000. The mortgage upon default of the bonds was foreclosed .and Mr. Hawes was paid for his services in that foreclosure. He .also rendered services in connection with the collateral securities held by the trust company, and it would seem that the claim is made to a lien upon the funds in the hands of the receiver, or a right to a preferential payment thereof on the ground that Mr. Hawes had some specific right or lien upon the bonds and stocks so held by the trust company as collateral. All that was ever received by the trust company out of these collaterals appears to have been the sum of $5,950. There does not appear to have been any judicial proceedings in connection with this collateral security; and, hence,
Second. Interest upon the preferred claims was not allowed by the-Special Term for the reason stated in the opinion of the court- that such preferred creditors having given receipts for and accepted the principal of their claims,' they are debarred from now recovering-interest. The learned judge held that the interest claimed by the preferred creditors is not contractual interest, but interest' as damages for non-payment of the debts, and the rule is that where interest is. recoverable merely as damages for non-payment of a debt, the creditor Cannot maintain an action for its recovery after accepting the principal, citing cases in support of that proposition. It is-very doubtful whether the view of the relations of these preferred creditors to this, fund are such as they were deemed to be by the-Special Term, but it is -unnecessary to consider that question for the-reason that, as we regard the rights of these preferred creditors, they were not entitled to interest at all in the situation of this fund until all the other creditors were fully satisfied. Upon this broad ground we think the decision of the Special Term may be upheld. The-right , of these preferred creditors, namely, the savings banks and Wickesy receiver,-arises out of the provisions of the charter Of- th& American Loan and. Trust Company, and not out of those of - the.
Third. Only the unpreferred creditors who filed exceptions to the report of the referee are before this court. It certainly seems inequitable that the exceptants alone should receive the distributable funds in the hands of the receiver, but the other unpreferred creditors have not pressed their claims nor put themselves in an attitude to receive the benefit of the ruling now made, or to review that of the referee. They acquiesced in his findings and are concluded thereby.
The order appealed from should be modified by restricting the right of the unpreferr'ed creditors to distribution of the fund created under the exceptions to those who filed exceptions to the report of the referee and were represented on this appeal.
Van Brunt, P. J., McLaughlin and Hatch, JJ., concurred.
Concurrence Opinion
I concur with Mr. Justice Patterson, except as to the disallowance of interest upon the deposits by the savings banks, as I think under the contract between fhe corporation and the savings banks the latter were entitled to contractual interest up to the time of payment, as the contract with the savings banks provided for the payment of such interest.
Order modified as directed in opinion, with costs of appeal to the respondent as against the savings banks, appellants.