
    People v. E. Remington & Sons. In re Whitfield et al.
    
    
      (Supreme Court, General Term, Fourth Department.
    
    April, 1891.)
    Payments—Under Mistake.
    The receivers of an insolvent corporation paid to a creditor $292.78, under an order of court establishing the priority of his claim as a preferred creditor. Thereafter, upon appeal to the court of appeals, the order was reversed. The creditor was also entitled to a dividend of 25 per cent, on an unpreferred debt of $2,930.62, which the receivers paid, less $183.31, the excess above 25 per cent, paid- upon the preferred claim. Held, that the creditor could not recover from the receivers the amount so reserved by them on the ground of a voluntai'y payment by them in the first instance, since such payment was by mistake, and could have been recovered from the creditor on that ground.
    Appeal from special term, Onondaga county.
    Action by the people of the state of New York against E. Remington & Sons. Application by James A. Whitfield against Albert H. Russell and Addison Brill, receivers, et al., for an order directing said receivers to pay petitioner the sum of $183.31, alleged to be unlawfully withheld from him by said receivers. Petitioner appeals from an order denying said application.
    Argued before Martin and Merwin, JJ.
    
      Geo. O. Rasbach, for appellant. Thomas Richardson, for respondents.
   Martin, J.

On April 21, 1866, this court duly appointed Albert H. Russell and Addison Brill as receivers in this action, which was to dissolve the defendant corporation. They subsequently qualified, entered upon their duties, and are still such receivers. The appellant had previously been engaged with men employed by him in working for the defendant in its shops, doing job or contract work. It was indebted to him therefor in the sum of $292.78 when the receivers were appointed. There were other persons who had similar claims. Soon after the receivers were appointed, they applied to a special term of this court for instructions as to whether claims like the appellant’s were preferred under chapter 376 of the Laws of 1885, which was an act to provide for the payment of wages to employes, operatives, and laborers of domestic corporations, other than insurance and moneyed corporations, of which a receiver should be appointed. The court held that such claims were preferred, and directed them to be paid in full by the receivers. In pursuance of that direction, which was made in May, 1886, the receivers paid the appellant on his claim $256.50, but subsequently declined to pay the remainder, amounting to $36.28. After the receivers’ refusal to make further payments on such claim, and in June, 1887, the appellant, and others who had similar claims, instituted a proceeding in this court, whereby they sought to have it adjudged that such claims were preferred under the statute, and to procure an order requiring the receivers to pay them as such in full. In that proceeding the appellant, and those who joined with him therein, were unsuccessful, as it was held by the special and general terms of this court, and by the court of appeals, (16 IT. E. Rep. 680,) that their claims were not within the provisions of the statute of 1885, and not preferred claims under it. During the pendency of that proceeding, and in March, 1889, the special term directed the receivers to pay to the general creditors of the defendant, who had proved their debts, a dividend of 25 per cent, thereon; but also directed that the receivers should defer the payment of any dividend upon any claim of the appellant, or those who joined with him in such proceeding, until the final determination thereof. The appellant also had an additional claim as a general creditor, amounting to $2,930.62. After that proceeding was finally determined by the court of appeals, the receivers paid the appellant on his claim of $2,930.62 the dividend of 25 per cent, directed to be paid the general creditors by the order of March, 1889, less the sum of $183.31, being the excess above 25 per cent, which had been paid by them upon the appellant’s claim of $292.78. After the decision of the court of appeals, by which it was held that the appellant’s claim was not preferred, and before this proceeding was instituted, the order or instructions to the receivers, made in May, 1886, directing such claims to be paid as claims preferred by the statute of 1885, was, on the application of the receivers, vacated and set aside. On the 9th day of December, 1890, the appellant made application to a special term of this court for an order directing the receivers to pay him the sum of $183.31 so deducted, which was denied, and from that order this appeal was taken.

The appellant challenges the order of the special term, upon the ground that, as the payment made by the receivers upon his claim of $292.78 was in pursuance of an order of this court, the subsequent decision in other cases did not open, annul, or affect his right to the money thus paid, and that the payments by the receivers upon that claim were voluntary, and could not be recovered back or deducted from the amount of his dividend. It will be observed that the order or direction to the receivers relied upon by the appellant has been vacated and set aside, and that the action of the court in thus setting it aside was based upon the determination in a proceeding instituted by the appellant upon his alleged preferred claim, in which proceeding it was, in effect, held that the order of May, 1886, was unwarranted and improper. That the court, under such circumstances, should award a restitution of the sum that was thus overpaid upon the appellant’s demand, is quite obvious. The question of voluntary payment is not, we think, involved in this proceeding. There was in this action a fund in the hands of the court for distribution by its receivers among the creditors of the defendant. The court mistakenly and erroneously instructed the receivers to pay one of the appellant’s claims in full. In a proceeding to which he was a party, it was decided by this court, and by the court of appeals, that he was entitled to receive upon his claim for $292.78' only the same proportionate amount as the other general creditors of the defendant. Thus he had been paid $183.31 more than he was entitled to receive. The amount of such overpayment was then deducted from the sum which would otherwise have been his due. This excess having been paid by mistake, the receivers could have recovered of the appellant the amount thereof. In re Morgan, 99 N. Y. 145, 1 N. E. Rep. 406; In re Underhill, 117 N. Y. 471, 22 N. E. Rep. 1120; Scholey v. Halsey, 72 N. Y. 578; Lott v. Swezey, 29 Barb. 87. It is therefore manifest that the sum which the appellant sought to recover in this proceeding did not ex cequo et bona belong to him. It was a part of the fund in the hands of the court which belonged to the creditors of the defendant, and which should be distributed among them. Under these circumstances, we think the receivers were justified in witholding that amount, and that the court properly refused to require them to pay it to the appellant. It follows that the order appealed from should be affirmed. Order affirmed, with $10 costs.  