Court Opinion

ID: 5328641
Source: CourtListenerOpinion
Date Created: 2022-01-08 05:04:15.258623+00
Date Added: 2024-06-11T08:29:25.362215
License: Public Domain

Crapser, J. (dissenting).
On September 1, 1931, the Fort Schuyler Farms, Inc., a domestic corporation, secured a license from the Commissioner of Agriculture and Markets, pursuant to the Agriculture and Markets Law, to operate several milk-collecting stations in this State. It posted the bond required under the law and began operating milk stations at Quaker Bridge, Cattaraugus county; Indian Castle, Oneida county; Herkimer, Herkimer county; Peekskill, Westchester county, and Andes, Delaware county.
Thereafter it rented the plant or station owned by the Andes Cooperative Dairy Company at Andes, N. Y., and there received the milk produced in the neighborhood from the producers who were mostly members of and stockholders in the Andes Dairy Company.
In March, 1932, the Commissioner requested an additional bond of $10,000, and that not being done, on June 9, 1932, he served the Fort Schuyler Farms, Inc., with a notice to show cause why its license should not be revoked.
*730On June 13, 1932, the producers at Andes procured the Fort Schuyler Farms, Inc., to deposit with certain trustees, selected by the Andes group, $15,000 of Meadow Sweet Farms, Inc., bonds as security for the payment of milk theretofore delivered at the Andes plant and for the current and past due rent of the Andes plant.
On June 28, 1932, the Commissioner of Agriculture and Markets received from the Schuyler Farms, Inc., $15,000, par value, of the Meadow Sweet Farms, Inc., bonds which he declared constituted in his hands a fund to be devoted, should occasion arise, to the same purposes as an additional surety bond. The Commissioner also required an assignment of the equity in the bonds held by the Andes trustees.
On August 24,1932, the Fort Schuyler Farms, Inc., was adjudged bankrupt by the United States District Court for the Northern District of New York. No dividend or distribution of the bankrupt’s assets has been made. The bankrupt owed 320 individual milk producers a total of $43,854.42 when.it failed. One hundred and seven of these were the Andes group, and their claims aggregated $16,623.56. The bankrupt also owed the Andes Cooperative Dairy Company $3,539.86 rent.
The other creditors were producers at Herkimer, Indian Castle, Quaker Bridge and Peekskill.
On January 12, 1933, the Commissioner collected $10,133.59 from the surety company on their bond. The $15,000 of the Meadow Sweet Farms, Inc., bonds deposited he still holds and their market value has not been definitely ascertained. They have not been liquidated.
On January 12, 1933, the Commissioner addressed a letter to all producer creditors of the Fort Schuyler Farms, Inc., wherein he proposed to pay the Andes producers three and four-tenths per cent of their claims pending liquidation of the Meadow Sweet bonds and the other producers groups twenty three per cent of their claims.
Protests were filed, which the Commissioner overruled by his determination, and the certiorari orders were applied for which are under review here.
The question here is whether the Commissioner had any right under the circumstances presented and under section 253 of the Agriculture and Markets Law to take any notice of these bonds in question with his determination.
It is argued on the behalf of the applicants that the Commissioner had no right to take any notice of those bonds and thence that he had no discretion to exercise in regard to the situation presented by them.
*731The Andes creditors had a hen upon the funds in the hands of the Commissioner which lien was the same , hen that all the milk producers of the Fort Schuyler Farms, Inc., had. In addition the Andes group also held as security for their claims $15,000, par value, Meadow Sweet Farms, Inc., bonds as a special security which was available to the Andes group only and was not available to the other milk producers of the Fort Schuyler Farms, Inc.
It has always been the law of this State that where a creditor has a hen upon two funds for the security of his debt, and another party has an interest in only one of these funds, without any right to resort to the other, equity will compel the creditor to take his satisfaction out of the fund upon which he alone has an interest, so that both parties may, if possible, escape without injury. (Ingalls v. Morgan, 10 N. Y. 178; People v. Remington & Sons, 121 id. 333; Stearns Suretyship [3d ed.] 182, 183; Dwelle-Kaiser Co. v. Moon, 140 Misc. 475, at p. 481.)
The determination made by the Commissioner is the one most consistent with equitable practice and produces the best practical results.
The determination of the Commissioner should be affirmed, with a single bill of costs.
Determination annulled, and matter remitted for the purpose of proceeding in accordance with the opinion, with fifty dollars costs and disbursements.