People v. Flour City Life Ass'n

DWIGHT, P. J.

The appellant was appointed at first temporary and afterwards permanent receiver of the defendant in an action for the dissolution of the corporation. He found among the assets of the association the sum of $2,435.13, belonging to the “mortuary fund in class B,” on deposit in the Central national Bank of Rochester. It had been deposited by the treasurer, in obedience to a by-law of the association, as follows:

“Eighty per cent, of the net assessments for mortuary purposes shall be deposited with such bank or trust company as may be designated by the directors, to the credit of the mortuary and benefit fund of the Flour City Life Association, from which all claims shall be paid.”

Before the appointment of the receiver each of the petitioners, respondents here, had received from the proper officers of the association an order on the treasurer for the payment of a claim which had been duly audited and approved by the executive committee, and which—allowing for difference of name and amount— was, in terms, as follows:

“Office of,” etc.

“Rochester, N. Y., July 25, 1891.

“To J. T. Baldwin, Treasurer: Pay to the order of Lydia E. Post, as executrix, two hundred three and 10/100 dollars, out of any sum belonging to the mortuary fund of class B, and this shall be your voucher.

“[Signed] Wayland Trask, 1st Vice Pres’t.

“$203.16. Ralph Mendon, Sect’y.”

The several respondents proceeded, by petition in the action in which the receiver was appointed, to obtain an order directing him to pay the several claims so allowed and certified, without waiting for administration of the receivership and a general distribution of the assets, on the ground that the several orders mentioned constituted, in effect, an equitable assignment, pro tanto, of the fund in question, and that the portion of the fund so assigned never came to the hands of the receiver as assets of the association, but belonged to the several claimants at the time of the appointment of the receiver. The holding at special term was in accordance with this contention of the petitioners, and was, as we think, entirely correct. ■ No question whatever is made of the justness and validity of the several claims, nor that they were duly audited and allowed by the proper officers of the association, nor that the several orders for their payment which were drawn upon the treasurer and delivered to the several claimants were so drawn and delivered in accordance with the uniform practice of the association in the payment of claims, of the character of those in question, established and allowed against its funds. "Upon their face they are drawn payable unconditionally out of a particular fund, and they seem to meet all the requirements of the rule' exemplified in the late cases of Brill v. Tuttle, 81 N. Y. 457, and Lauer v. Dunn, 52 Hun, 194, 5 N. Y. Supp. 161, and 115 N. Y. 405, 22 N. E. 270, to make them so many assignments, pro tanto, of the fund named in them. The contention to the contrary "is based upon a by-law of the association as follows:

“Every claim, provided it shall have first been approved by the executive ■committee, shall be paid by means of an order drawn upon the depositary •of the mortuary and benefit fund, signed by the president or vice president, treasurer and secretary, and made payable to the 'order of the beneficiary, ■if living,” etc.

The objection is that the orders were not drawn by the officers mentioned in the by-law, nor upon the depositary of the fund. But this objection fails to discriminate between the custodian of ;the fund and the depositary of the fund, and assumes—contrary, .as we think, to the principle involved—that the order which shall -operate as an assignment of the fund must be drawn upon the latter. The treasurer is, no doubt, in a proper and important ;sense, the custodian of the funds of the association. They came -originally to his hands; and though, for their better security, he is required to deposit them, he must yet keep his account with them, charging them with moneys received by him and deposited to their credit, and crediting them with moneys drawn from them for the payment of claims to which they must respond. Such being substantially the manner in which the accounts of the association were kept, as by all analogy and precedent we must assume it to be, it was certainly very proper, if not absolutely necessary, that the first step in the payment of any claim which had .been duly allowed, should be an order such as those in question in this case, drawn by the proper officers, upon the treasurer of the association, payable out of the appropriate fund; and, though ■such an order was required to be supplemented by a check, signed by the treasurer, with other officers, upon the bank where the money was deposited, for the actual payment of the claim, yet it seems to us that it was the order on the treasurer, rather than the check on the bank, which, within the principle1 relied upon here, constituted the equitable assignment of the fund. The affidavit of the receiver himself shows that it was the practice of the association to give such an order on the treasurer as the first step in the payment of claims which had been allowed, and that upon the presentation of that order to the treasurer, duly indorsed, he paid it by delivering to the payee or indorsee the check on the bank prescribed by the by-law last quoted above. We do not find, upon the proofs made, that the case of the claimant Gullinan was, as suggested in the brief of counsel for the appellant, an exception to the rule which embraces all the other claims in question. In respect to all of them we think the order at special term was correct, and should be affirmed.

So ordered, with §10 costs and disbursements of the appeal to each of the groups of respondents appearing by separate attorneys, payable by the receiver out of the fund. All concur.