Case ID: ny_177/html/0231-01.html
Source: Caselaw Access Project
Author: {"author": "\n      Per Gwriam.\n    ", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The People of the State of New York v. The American Loan and Trust Company. In the Matter of Proofs of Claims upon the Accounting of J. Edward Simmons, as Receiver of The American Loan and Trust Company, Respondent. Euphemia E. Hawes, as Executrix of Granville P. Hawes, Deceased, et al., Appellants and Respondents. Louis Bauer et al., Respondents and Appellants.
    Corporations — Distribution oe Property Among “Pair and Honest Creditors” by Judgment op Dissolution — Code Civ. Pro. § 1793. The term “ fair and honest creditors,” used in section 1793 of the Code of Civil Procedure, relating to the j ust and fair distribution of the property of a corporation in an action for its dissolution, includes not only those whose diligence has given direction to the conduct of the proceeding, but all creditors who are within the descriptive terms of the statute.
    
      People v. American Loan & Trust Cío., 87 App. Div. 139, modified.
    (Argued January 7, 1904;
    decided January 19, 1904.)
    Cross-appeals from an order of the Appellate Division of the Supreme Court in the first judicial department, entered November 12, 1903, which modified and affirmed as modified an order of Special Term directing the distribution of funds in the hands of the receiver herein.
    
      Barclay E. V. McCarty and James Anderson Hawes for Euphemia A. Hawes, as executrix of Granville P. Hawes, deceased, appellant and respondent.
    
      O. P. Metcalf for Manufacturers and Traders’ Bank et al., appellants and respondents.
    
      H. B. Closson and William E. Camochan for Thomas G. Ritch et al,, as executors of Daniel B. Eayerweather, deceased, appellants and respondents.
    
      Clarence E. Thornall for Edward F. Browning et ah, as executors of Qharleg S. Hull, deceased, et al., appellants and, respondents,
    
      
      James Dunne for Louis Bauer et al., respondents and appellants.
    
      Alfred Ojyd/yTte and William ¡S. OpdyTte for receiver, respondent.
   Per Gwriam.

So much has been written in the various phases of the proceeding now before us for final review that we need do no more than state our conclusion in the light of a single prefatory observation .as to the nature and purpose of the proceeding. Its object is to secure a “a just and fair distribution of the property of the corporation, and of jhe proceeds thereof, among its fair and honest creditors.” (Section .1193, Code Civ. Pro.) The parties now before the court are all “fair and honest” creditors in the same class. Justice and equity, therefore, no less than the express command of the statute, require that there shall be a “ just and fair ” distribution of the fund among them. Not a distribution among those whose diligence has given direction to the conduct of the proceeding, but among all who are within the descriptive terms of the statute. The statute is our sole guide, and to its peremptory direction, rules of courts and conflicting views of counsel must yield. Our conclusion is that all the unpreferred creditors before the court on this appeal stand upon an equal footing and are entitled to a ratable division among them of the fund in dispute.

The order of the Appellate Division should be modified accordingly, and as thus modified affirmed, without costs to any of the parties.

Parker, Ch. J., O’Brien, Bartlett, Martin, Yann, Cullen and Werner, JJ., concur.

Ordered accordingly.