Case Name: MICHAEL SNOW, Respondent, v. THE RUSSEL COE FERTILIZER COMPANY. ROBERT C. DAVIDGE, Appellant
Court: New York Supreme Court
Jurisdiction: New York
Decision Date: 1890-10
Citations: 65 N.Y. Sup. Ct. 134
Docket Number: 
Parties: MICHAEL SNOW, Respondent, v. THE RUSSEL COE FERTILIZER COMPANY. ROBERT C. DAVIDGE, Appellant.
Judges: 
Reporter: Supreme Court Reports (Hun)
Volume: 65
Pages: 134–140

Head Matter:
MICHAEL SNOW, Respondent, v. THE RUSSEL COE FERTILIZER COMPANY. ROBERT C. DAVIDGE, Appellant.
Agreement by the president of a corporation to postpone the enforcement of his daim against it—not enforceable by a receiver — consideration.
An agreement made by a creditor, the president and largest stockholder of a ' corporation, with a firm to which such corporation was also indebted, “in consideration of said firm’s not pressing their claim to compulsory collection,” that such president and stockholder would not enforce a claim existing in his favor for a balance of salary due him until after the other creditors of the corporation should have been fully paid, is not enforceable by a receiver, subsequently appointed, of the assets of such corporation, nor has the receiver a right in such a case to defer any payment to the president of the balance due him for salary until the claims of all other persons, creditors of such corporation, shall have been paid.
Lcmrence v. Fox (20 N. Y., 268) distinguished.
Such agreement on the part of the president of the corporation is not enforceable by the receiver thereof, as the representative of the company or of its stockholders, nor as the representative of the particular firm, the creditor of the corporation making such agreement with its president. (Barrett, J., dissenting.) Semble, that such agreement must be enforced, if at all, by the creditor of the corporation with whom it has been made, and not by the receiver thereof for the benefit of such creditor.
In such a case the agreement is too vague and indefinite for enforcement, as the firm creditor does not bind itself to refrain from proceeding against the company for any given period of time, nor is the period of forbearance by the president for the enforcement of his salary stipulated, and there is, therefore, neither a valid consideration nor mutuality.
Appeal by Robert 0. Davidge from so much of an order made in the above-entitled action, April 27, 1889, and entered in the office of the clerk of the county of New York on May 15, 1889, as ordered that the receiver of the Russel Coe Fertilizer Company, upon his accounting and distribution of the assets of said company among its creditors, pay the amounts of the claims of all its creditors, excepting the claim of said Davidge, in full, or so much thereof as said assets would pay, and that the claim of said Davidge be paid only after all other claims against said company shall have been paid, and out of the residue of said assets, and from every part of said order which postponed the claim of said Davidge, to the claims of other creditors of said company.
The order appealed from was made upon the report of a referee appointed by the court to take testimony and report concerning the dispute between the receiver of the defendant, the Russel Coe Fertilizer Company and Robert C. Davidge, touching claims of said Davidge against said company.
The referee found, among other things in his report, that the said Robert C. Davidge was president and general manager of the Russel Coe Fertilizer Company, and as such had agreed with the trustees thereof that he should receive a salary for his services at the rate of $4,000 a year; that he had acted as president and general manager of the company from about the 24th day of January,' 1885, to August 25, 1886, and had drawn during said period from said company at different times various sums of money, which paid his salary up to January 1, 1886; that on or about the 25th day of August, 1886, the plaintiff Michael Snow was appointed receiver of the Russel Coe Fertilizer Company, and that the said Davidge had not been paid for the services he had rendered to the Russel Coe Fertilizer Company from January 1, 1886, to August 25, 1886, which, at the rate above mentioned, would amount to the sum of $1,945.87; and that said Davidge’s services to the defendant’s company were fairly and reasonably worth the sum of $4,000 per annum. The referee further found as follows:
"VIL That George H. Nichols & Co. were creditors of the defendant and were pressing the company for the payment of their claims, and in the month of July, 1885, said Davidge, the defendant’s president as aforesaid and its principal stockholder, agreed with said Nichols & Co. not to draw nor receive any salary from the defendant during the company’s period of liquidation, in consideration of said iirm’s not pressing their claim to compulsory collection; that said Nichols & Co. complied with said agreement, did not sue the defendant nor collect their demands, and are now creditors of the company.
In my opinion, on the evidence taken by me pursuant to said order, Robert C. Davidge has established no valid claim against the defendant in the matter submitted to me, and is not a creditor of the said, the Russel Coe Fertilizer Company.
F. C. Oantme, for the appellant.
Henry Sanger Snow, for the respondent.

Opinion:
Barrett, J.:
I agree with Mr. Justice Bartlett that the promise alleged to have been made by Davidge to Nichols & Co. is not enforceable by the receivei as the representative of the company, or of its stockholders generally. But I cannot concur in the conclusion that such promise is enforceable by the receiver as the representative of Nichols & Co. The receiver does not represent any particular creditor, nor has he any privity in the disputes between individual creditors growing out of special arrangements between themselves, such as are set up in this proceeding.
If Nichols & Co. are entitled to exclude Davidge, or to take for themselves the whole or any part of the dividend coming to him, they must act directly.
The receiver cannot, for their benefit, avail himself of any estoppel which may have inured to them.
But, further, I am of opinion that no case for Davidge's exclusion, even as against Nichols & Co., has been made out: J) The agreement on that head is too vague and indefinite for enforcement. Nichols & Co. did not bind themselves to refrain from proceeding against the company for any given period, nor was the period of Davidge's forbearance, with regard to his salary, stipulated. There was neither a valid consideration nor mutuality. 7;
Now that the company is in the hands of a receiver, I can see no good reason for discriminating between these creditors. They should share alike. Davidge's claim, however, is only for the sum of $1,945.87, that being the amount which had accrued at the date of the appointment of the temporary receiver.
The order should be reversed and the receiver directed to admit Davidge's claim to the above extent as valid, and to pay it pro rata with the other claims against the company.