Opinion
A creditors' committee, which was elected to take over the assets and wind up the business of one M, wrote to the plaintiff, who had a claim against M on a note, telling him of the situation and of its hope to pay creditors one hundred cents on the dollar if the plaintiff would withdraw his claim "for the present," and the plaintiff replied that he was willing to withdraw his claim for any reasonable length of time, but would expect the percentage due him. Held that the plaintiff had not waived his right to receive the same percentage of his claim as the other creditors, and the committee, which had paid a dividend to all the creditors except the plaintiff, was personally liable to him for the percentage which he would have received had his claim been treated as were the others.
Argued October 23d 1929
Decided January 6th, 1930.
ACTION to recover damages from the defendants, a creditors' committee, for failure to pay the plaintiff a dividend alleged to have been due him, brought to the Court of Common Pleas for New Haven County, where the defendants' demurrer to the complaint was overruled, and the issues tried to the court, Pickett, J.; judgment for the defendants and appeal by the plaintiff. Error; judgment directed for plaintiff.
Robert H. Alcorn, with whom, on the brief, was William F. Alcorn, for the appellant (plaintiff).
Samuel Campner, for the appellees (defendants).
At a meeting of the creditors of George B. Mansfield, who had become financially embarrassed, the defendants were elected a creditors' committee to take over his assets and wind up the business in the interest of all creditors, which they proceeded to do. The plaintiff, who was related to Mansfield by marriage, had a claim against him upon a note which with interest amounted to $1775.50. The defendant Barnes wrote to the plaintiff, who lived in Pasadena, California, advising him of the situation, and stating that it was felt they could pay creditors one hundred cents on the dollar if the plaintiff would withdraw his claim "for the present," which he requested him to do. The plaintiff replied: "Am willing to withdraw my claim for any reasonable length of time, but would expect percentage due me." The defendants have collected assets of the estate to the amount of $2568.35 and paid an eighty per cent dividend on claims totaling $3018.93, not including the claim of the plaintiff upon which they have paid nothing. They have not to exceed $300 on hand, and outstanding accounts of about $800 which have been in the hands of a sheriff for collection for about a year. If the plaintiff's claim had been included the total liabilities would have been $4794.43 and the percentage paid to creditors would have been .5357. This percentage upon plaintiff's claim would be $950.87 for which amount he claims the defendants are personally liable to him.
It was the duty of the defendants as trustees for the creditors to collect the assets and distribute the net proceeds ratably among them. The plaintiff was entitled to receive from them the same percentage of his claim as other creditors unless it was waived as a result of the letters passing between himself and the defendant Barnes. Barnes' letter asked the plaintiff to withdraw his claim "for the present" which could mean no more than to forbear to press it and thus enable the defendants to proceed with the settlement of the estate, as they could not do if any creditor took action to enforce the collection of his claim. That this is the sense in which the plaintiff understood it is clear from his reply in which he agrees to withdraw his claim "for any reasonable time" but states that he would expect the percentage due him. That does not indicate a willingness to subordinate his claim to those of the other creditors, but on the contrary states his expectation to share equally with them in the distribution of the assets of the estate. The defendants were not justified in putting any other construction upon it, and it was their duty, in making distribution of the assets, to treat the plaintiff's claim on the same basis as those of the merchandise creditors. The complaint alleges that their failure to pay any portion of the plaintiff's claim was in violation of their duty, and the agreed statement of facts discloses such violation of duty as trustees which renders them personally liable to the plaintiff.