Opinion
08-17-1895
DURYEE v. UNITED STATES CREDIT SYSTEM CO.
H. W. Hayes, for receiver. Walter J. Knight, pro se.
Action by George S. Duryee against the United States Credit System Company. Defendant's receiver applies for directions as to the priority of certain claims. Directions given.
H. W. Hayes, for receiver.
Walter J. Knight, pro se.
BIRD, V. C. This is an application by the receiver for directions from the court respecting the claims of certain creditors who insist that they are entitled to priority over general creditors. The president of the company, Mr. Fiedler, claims compensation for services as president and as general manager. I cannot allow, nor do I reject, this claim as it now stands. There is only the declaration that he acted as manager, without any proof whatever as to the services which were required of him, or which he actually performed, as such manager. As the case stands, it is within the principle declared in England v. Organ Co., 41 N. J. Eq. 470, 4 Atl. 307, which has been followed, as I understand, by all the members of the court. The principle enunciated in that case was and is designed for the protection of real and actual employes of corporations, as against persons who have simply a name or title, without rendering valuable service to the company. It may also be said that for this same purpose the law limiting the preference of claims to two months immediately preceding insolvency was enacted. This, it will be seen, applies to all classes of claims for preference, and is equally designed for the protection of general creditors. Therefore, while I do not allow the claim of Fiedler, I will not advise the receiver to reject it until Mr. Fiedler has an opportunity to establish to his (the receiver's) satisfaction that he rendered actual service to the company during the last two months of the company's vitality. The principle involved in what I have above said sustains the claim to preference of all the other applicants. In the matter of Weatherby v. Woolen Co. (N. J. Ch.) 29 Atl. 326, the question was presented as to the rights of a director, who was manager also, and the rights of a president who was offered a salary with the understanding that he should assist the manager. The claim of the director for two months' service, who was actual manager, and rendered valuable service to the company, was allowed, and the claim of the president for manager also was so shadowy, and manifestly so unnecessary, was rejected. If this case was rightly decided (and I may say it had the concurrence of all the members of the court), then all of the other claims to preference in the case now under consideration should be allowed, so far as they clearly appear to be for services rendered within the two months prescribed by the statute. This, of course, includes compensation by way of commissions. On the point of commissions, the only inquiry which should concern the receiver is whether the services rendered for which commissions are claimed were actually rendered within the two months. With respect to Fiedler's claim, the receiver should proceed, as the statute directs, to take proofs, and then to adjudge with respect to the merits of his claim. This being done, the case will be opened for an appeal in case any person feels himself aggrieved by the decision of the receiver.