Attorney General v. Guardian Mut. Life Insurance

In this case I am of the opinion that the judgment creditor is not entitled to any preference over the other creditors of the insolvent corporation. The judgment was not entered until long after the appointment of the receiver, no real estate came into the possession of the receiver, and the corporation did not, so far as the papers show, own any real estate upon which the judgment became or could become a lien. It also appears that no execution was ever issued upon the judgment. It is provided by statute that the assets of insolvent corporations shall be distributed by the receiver among all those who shall have exhibited their claims as creditors, and whose debts shall have been ascertained as follows: (1) All debts entitled to a preference under the laws of the United States. (2) Judgments actually obtained against such corporation to the extent of value of the real estate on which they shall respectively be liens. (3) All other creditors of such corporation, in proportion to their respective demands, without giving any preference to debts due on specialties. 3 Rev. St. (7th Ed.) p. 2401, § 79.

It is obvious that the judgment in question is not a debt which is preferred under the laws of the United States. It is equally certain that there is no real estate upon which it has become a lien. The debt, which is evidenced by the judgment, must therefore fall under the third class, which relates to general and unpreferred creditors.

It seems to me that a mere perusal of the statute is Sufficient to settle the question of preference which is involved in this motion. See, also, Attorney General v. Insurance Co., 100 N. Y. 279, 3 N. E. Rep. 193. Again, it may well be doubted whether the judgment creditor is not estopped by the proceedings taken before Mr. Parsons, the referee, and by the report made therein, which was confirmed by this court, and also by the payments of the dividends which were made under that report. As to the power of the court to grant this motion, it seems to be only necessary to refer to the case of Attorney General v. Insurance Co., 77 N. Y. 277, and cases cited in the opinion of the court. Let an order be entered on one day’s notice, in accordance with these views.