In re People

• Decision Date: 10 February 1931
• Citation: 175 N.E. 113,255 N.Y. 412
• Parties: In re PEOPLE, by BEHA, Superintendent of Insurance. In re SECOND RUSSIAN INS. CO. Claim of MURPHY.
• Court: New York Court of Appeals Court of Appeals

255 N.Y. 412

175 N.E. 113

In re PEOPLE, by BEHA, Superintendent of Insurance. In re SECOND RUSSIAN INS. CO. Claim of MURPHY.

Court of Appeals of New York.

Feb. 10, 1931.

In the matter of the application of the People of the State of New York, by James A. Beha, Superintendent of Insurance of the State of New York, etc., respecting the Second Russian Insurance Company, claim of John F. Murphy. From an order of the Appellate Division of the Supreme Court (230 App. Div. 834, 244 N. Y. S. 902), modifying and as modified affirming an order of the Special Term, an appeal is taken.

Affirmed.

Appeal from Supreme Court, Appellate Division, First department.

Hartwell Cabell and Blaine F. Sturgis, both of New York City, for appellant.

James F. Donnelly, Alfred C. Bennett, John M. Downes, and Clarence C. Fowler, all of New York City, for respondent.

CARDOZO, C. J.

Appellant levied an attachment upon the surplus or reversionary interest of the Second Russian Insurance Company in assets deposited in this state as security for local debts.

The domestic business having been liquidated and the local debts discharged, the surplus in the possession of the liquidator must be paid to the attaching creditor, upon proof of his claim, to the extent of the attachment lien.

The rule in that regard was settled by a recent decision (Matter of People, by Beha [In re First Russian Ins. Co.], 253 N. Y. 365, 171 N. E. 572),and is not questioned by either party. The dispute is solely as to the interest.

The respondent takes the position that in the distribution of the surplus, interest is always limited to a period beginning with the date of the warrant of attachment, and can never include interest previously accruing. The appellant insists in opposition that the interest payable by the liquidator must include whatever interest is protected by the lien.

Unquestionably the latter must be accepted as the proper rule. There was no thought in the case cited (Matter of People, [First Russian Ins. Co.] supra) to suggest anything to the contrary. It so happened in that case that the only interest demanded was interest from the date of the attachment. The very basis of the decision was that whatever was a lien upon the fund in advance of liquidation was preserved as a lien upon the surplus when liquidation was over. Cf. Matter of People, by Beha (Moscow Ins. Co., Claim of Lesch) 255 N. Y. 570, 175 N. E. 317.

The appellant is, therefore, right in his formulation of the rule, but wrong, as we shall see, in its application to the facts. In his affidavit on attachment, he demands judgment for...