Orton v. Orton. that the leading intention of the testator, as shown by the will, was to give his wife about one-half of his personal estate, and as there was scarcely any indebtedness, and the widow was an executrix, it was seen that she would have no difficulty in making her election within a year, between her dower and the provision made by the will, in lieu thereof, even though that provision should be subject to a pro rata reduction, with the other legacies, in case of a deficiency. Upon such reduction, in case of a deficiency, and upon the corresponding increase in case of a surplus, the ratio would be preserved, and the leading intent carried out. The proceeds of the twelve-acre lot mentioned, it is manifest he did not intend the widow to share in, but that does not militate against the construction above adopted. In regard to the specific real estate mentioned in the will, his scheme of distribution was different from that adopted for the personal estate. His Connecticut lands he gave to one brother and two sisters, the homestead to his wife for life, remainder to the other legatees, who should survive her, or their children, in proportion to their legacies, and this twelve-acre lot to his heirs in the same proportion. The absence here of the ratio appearing in the distribution of his personal estate, does not disprove the intent indicated by the existence of that ratio in that distribution; nor tend to show that he did not mean to include the wife's legacy among those subject to be reduced by a deficiency and increased by a surplus. It is said that the great disproportion which this construction gives the widow is the reason for not adopting it. As there were no children, and no representatives of any, if there had been no will, the widow would have been entitled to onehalf of the personal estate. It would seem, then, that a construction of the will which gives her only one-half, does not give her an undue proportion. But this objection also denies the intent of the testator to give her half. We are to assume from the fact, that he provided for the event both of a deficiency and a surplus,—that he supposed the legacies which he gave might exhaust the whole of his estate. Supposing this, he distinctly gives his wife twenty-five thousand dollars, and all the other legatees together twenty-five thousand one hundred Orton v. Orton. dollars. This he intended; and he consequently intended, if his estate, not otherwise disposed of, should just cover these legacies, that the ratio thus indicated should be the ratio of distribution between his wife and the other legatees in the aggregate. He meant, in case of a deficit, or a surplus, to keep up the ratio established by a comparison of his various legacies, for, all deductions are to be in proportion to the sums given to cach, and all additions from the surplus in the same proportion. I can see no reason for excepting the sum given to the widow from the operation of this direction. As no intent to exclude it appears, it is necessary to give the language its ordinary meaning and legitimate effect, and that will clearly include the legacy to the widow, as one of the "within legacies," which are to be diminished in case of a deficiency, and increased in case of a surplus. His making the portion of the surplus divided to each, subject to the same conditions imposed upon the original legacies, affords no reason for supposing that he did not intend to include the widow in this division. It is conceded that the legacy given to her in lieu of dower is given without condition; the same is true of the legacies given to his brother, James Orton, his nephew, Samuel De Graff Orton, and his niece, Eliza Stewart, and the same consequence would result to them. But this division to each is not dependent upon the existence of a condition annexed to the prior legacies. When the legacy has such condition, the sum added from the surplus is to be subject to the same condition, is all that is meant by the language of this bequest. I think the judgment of the supreme court clearly right, and that it should be affirmed. All the judges concurred. Judgment affirmed, with costs. III-27 Osgood v. Laytin. OSGOOD v. LAYTIN. September, 1867. Affirming 48 Barb. 463. Where an insurance company, organized under the general law applic ble to such companies, being insolvent, distributes its capital among its stockholders, thus placing the fund beyond the reach of its creditors, it acts in fraud of its creditors, and the fund may be recovered back from those who received it, by a proper action commenced by the proper parties. The complaint in such case need not aver that in making such distribution it was done with an intent to defraud the creditors. The receiver of the company, since he represents the creditors, is the proper person to bring such action. No creditor can individually maintain an action against an individual stockholder, for the share so illegally distributed to him; the liability is to the creditors generally, and the action should be commenced by some party representing all the creditors.* In such action it is proper for the receiver to join as defendants any creditors who have instituted such suits, and those who threaten to do so, for the purpose of protecting the stockholders from a multiplicity of actions. G. A. Osgood and Cyrus Curtiss, receivers of the Columbian Insurance Company, brought this action against William Laytin and many others, for the purpose of recovering back dividends which certain of the defendants, as stockholders, had received out of the capital, and of restraining other defendants, who were creditors, from prosecuting individual actions for the same purpose. The Columbian Insurance Company was organized by virue of the general act of 1849, ch. 308; and was dissolved by the judgment of the supreme court, in February, 1866. The plaintifs were subsequently appointed receivers, as successors of the receivers originally appointed; and they duly qualified. In July, 1866, the company, being insolvent, had paid a dividend of three and one-half per cent. upon its stock to its * Affirming in effect Barry v. Brett, 6 Bosw. 627, 637. This decision was distinguished in Weeks v. Love, 50 N. Y. 568. See, also, the next case, p. 425 of this volume. Osgood v. Laytin. stockholders. Some of its creditors, individually, commenced actions against several of the stockholders separately, to recover from them the amount of the dividend so received. Whereupon the plaintiffs commenced this action against all the stockholders who had received dividends, and also against the creditors who had commenced such actions, and they demanded judgment against the stockholders severally for the amount of the dividends respectively received, and a judgment against the creditors, perpetually restraining them from the prosecution of suits against the stockholders for the collection of the dividends received.* The complaint (omitting allegations as to the appointment and qualification of the receivers), was in the following form: "IX. That on or about the 2nd day of January, 1866, the said Columbian Insurance Company paid a dividend upon the capital stock of the company to each of the stockholders, defendants herein, to the amount set opposite their names respectively, in the schedule hereto annexed, marked' A,' which is made a part hereof. "X. That all the defendants except [naming certain individuals who were joined because they were suing as creditors] were, at the time said dividend was paid, holders of stock in the said company, and each of them respectively then owned the number of shares of the par value of one hundred dollars each, stated in the schedule hereto annexed, marked 'A,' and received the amount of dividend upon said stock therein stated, at the time therein stated. That the defendants comprise all the stockholders of said company, except a few who did not receive said dividend. "XI. That at the time of the payment of the said dividends, the said Columbian Insurance Company was insolvent, and no profits had been earned upon its capital, but such dividends were paid entirely out of the capital of the company, which was then greatly impaired, so as to be insufficient for the payment of the company's debts without the return of such dividend and shortly afterward, the proceedings above mentioned were taken, under which the plaintiffs were appointed receivers of the said company. "XII. That the defendants [naming those who were excepted in paragraph X.] claim to be creditors of the said company, and as such, have commenced actions against a large number of the stockholders thereof, who are among the defen lants, to recover the dividends received by them as aforesaid, and threaten to sue in like manner all the stockholders who received such dividends. " 'XIII. That there are many other creditors of the said company who threaten to bring similar actions against its stockholders, and that such Osgood v. Laytin. The stockholders demurred to the complaint, upon the ground that the facts stated constituted no cause of action; the creditors demurred upon the same ground, and also because the plaintiffs had not legal capacity to sue; there was a defect of parties defendant, and several causes of action were improperly united. Judgment was given for the plaintiffs upon the demurrers at special term. The supreme court, on appeal, at the general term, affirmed the judgment. Reported in 48 Barb. 463. Defendants appealed to this court. Elbridge T. Gerry, for defendants, stockholders, appellants;-I. The receivers cannot recover, unless upon the ground that as trustees they represent the entire body of creditors. Smith on Rec.; Hutchinson v. Massarene, 2 Bull & Beatty, 55; Davis v. Malborough, 2 Swanst. 118; Curtis v. Leavitt, 15 N. Y. 9; In re Burke, 1 Ball & Beatty, 74; L 1858, p. 506, c. 314, § 2; 3 R. S. 5 ed. 226; Talmage v. Pell, 7 N. Y. (3 Seld.) 328; Pentz v. Hawley, 1 Barb. Ch. 122; Nathan v. Whitlock, 9 Paige, 152; Edw. on Rec. 141-2, and cases there proceedings, if carried on, will result in a great multiplicity of probably several hundred in number. "Wherefore the plaintiffs demand judgment: suits, afore "I. That each of the defendants named in the schedule here to annexed, marked A,' pay to the plaintiffs the sum received by him on account of dividends from the Columbian Insurance Company as said, as set forth in schedule A,' hereunto annexed, together with interest thereon from the day upon which he received the same as aforesaid. "II. That the defendants [naming those mentioned in paragraph■ XII], and such other creditors as may hereafter bring actions of a like nature, be restrained by injunction from bringing any actions against any of the other defendants above named, or against any other stockholder of the Columbian Insurance Company, for the recovery of dividends received by them from the said company, and from proceeding in any such action already brought. "III. That each and every one of the other defendants be restrained by injunction from paying or securing to be paid, any dividend received by him from the Columbian Insurance Company to any person other than the plaintiffs." |