
    Howard M. Baker and Others, Respondents, v. George W. Turner, as Receiver, etc., of The New York Recorder Company, Appellant.
    
      Receiver—when a claim is not entitled to preference in payment—when a trust fund is not shown to exist.
    
    The receiver of the funds of an insolvent corporation, to which a firm has consigned goods under an agreement which provided that the firm should deliver the.goods in the quantity which the-corporation should order between certain dates; that on or before a date named the corporation should render its account and pay over to the firm, from the amount received for the goods sold by it, the consigned price of such goods, and should return those unsold or retain them upon payment of the consigned price, cannot, in the absence of proof as to the price obtained for the goods sold by the corporation (the moneys received by the corporation for such goods not being kept by it separate from its other funds), he compelled to pay out of the funds in his hands their consigned price.
    In such a case there is a total failure to show any trust funds in the hands of the receiver upon which the firm has a lien superior to that, of the other creditors of the corporation.
    
      Appeal by the' defendant, George W. Turner, as receiver, etc., of the New York Recorder Company, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 8th day of January, 1897, directing him to pay over certain moneys to the plaintiffs.
    
      William H. Stayton, for the appellant.
    
      Dunccm Edwards, for the respondents.
   Van Brunt, P. J.:

In the month of April, 1896, the New York Recorder Company was a corporation doing business in the city of New York, and said company entered into an agreement with the firm of Baker, Carver & Morrell, by which said firm were to deliver to said Company, or upon its order, upon consignment, as many American flags as said company should order between the 15th day of April and the 2d day of July, 1896, and that on or before the 14th day of. July, 1896, the said company should render its accounts to said firm, and pay over to: it from the amount received for said flags sold by said company the amount specified in the bills of said firm upon the delivery of said flags to said company, and should return any flags . then remaining on hand, or said company could retain such remaining flags by.paying for them at the consigned price. No credit was given to the company for the consigned price of the flags. The firm had the privilege of withdrawing any of said flags at any time they desired to do so prior to the sale -thereof by the company. Between the 15th of April and the 2d of July, 1896, there were delivered to said .company, or upon its order, by said firm, in accordance with this agreement, flags of the agreed value of $1,759.70, which said flags, so delivered, were sold by said company, and the money in payment for the same was received by said company,, but sard company did not keep said money apart' from its other funds, the said moneys being- received at various times throughout said period- and mingled with the other funds of the company.

On the. 3d of July, 1896, the appellant was appointed receiver in an action brought in this court for the dissolution of the corporation upon the ground of insolvency, and there Were delivered to him by the company upon that day moneys in excess of the amount of the plaintiffs’ claim and in excess of the amount of the claim of the Rochester Fireworks Company, which company also claimed that thp appellant should be required to pay certain alleged trust moneys to it. ■ No part of said $1,759.70 has been paid.

Upon this state of facts the court made an order directing the receiver to pay out of the moneys, assets and property received by him as receiver of the company the said sum of $1,759.70, with interest from July 14, 1896, and from the order thereupon entered this appeal is taken.

There is one point claimed by the counsel for the respondent which does not appear to have been established in this proceeding, and -that is that the Recorder Company received the sum of $1,759.70 upon the sale of the flags disposed of by it. Upon the contrary, the referee who was appointed to take proof of the facts reported simply .that flags to that amount were consigned to the company and that they were sold by it, but at what price he does not say, and that the moneys received therefor were mingled with the general moneys of the concern; The whole of the argument of the respondent is based upon this assumption. The counsel states that this $1,759.70 was a definite and fixed sum in the possession of the Recorder Company, belonging to the claimant. As we have already stated, there were no facts found to justify this claim. What was received by the Recorder Company for these flags does not appear, and hence there is no foundation for the claim that there was any specified or fixed .sum in the hands of the Recorder Company at the time the appellant was appointed receiver and took possession of the assets.

' It is clear upon a reading of the agreement in question that the Recorder Company in no way violated its obligation' to the claimants if it sold the flags at a price below that at which- they were consigned, because it had a right to take the flags itself, if it so desired. It became liable to pay the consigned price whether it sold the flags or bought them itself, and that was the sole obligation which the company incurred under the agreement entered into between it and the claimants. It was the ordinary relation of debtor and -creditor. It is true that it is stated in the agreement that the company was to pay out of the- moneys, received for the flags, but that could not apply to the whole contract, because if the company chose to take the flags upon its own account there would be no money received- from which payment could be made, and .under those circumstances the contract expressly- provided that the company should! be liable for the price at which the flags were consigned. No limitation was placed upon the right of the company to sell the flags at any'price-it might see At, and. if it sold bélow the consigned price it is clear that it. became a debtor for the consigned price and nothing else; ; .

Upon the whole, case, therefore, it seems to us that there was á total failure to show any trust funds in. the hands of the receiver upon- which these claimants had a. lien superior to the -other creditors of the company.

The order should be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars- costs.

Rumsey. Williams, Ingraham and Parker, JJ., concurred.

Order reversed, with, ten dollars costs and disbursements, and motion denied,-with ten dollars costs.  