De Peyster v. American Fire Insurance
New York Court of Chancery
Tins was an appeal from a decree of the vice chancellor of the first circuit dismissing the complainant’s bill. Previous to the great fire in New-York, by which the American Fire Insurance Company lost its whole capital and was rendered insolvent, the complainant loaned to the company, for the purpose of paying a loss which had occurred, $2000, which amount the company agreed to repay to the complainant with interest, on demand.
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Tins was an appeal from a decree of the vice chancellor of the first circuit dismissing the complainant’s bill. Previous to the great fire in New-York, by which the American Fire Insurance Company lost its whole capital and was rendered insolvent, the complainant loaned to the company, for the purpose of paying a loss which had occurred, $2000, which amount the company agreed to repay to the complainant with interest, on demand. And as the company had a surplus on hand, in addition to its capital, of about $6000 at the time of the fire, the complainant claimed a preference in payment to the…
1Opinion of the Court
The Chancellor.
There is no legal or equitable foundation for the claim of preference in payment which the complainant is attempting to establish in this case. Although the assets of the company are in the nature of a trust fund for the payment of the debts due to the creditors of the corporation, no one of those creditors is entitled to any preference in payment over another, unless he has obtained a specific appropriation of or prior equitable lien upon some particular part of the fund. In this case it is not pretended that the identical $2000 which the complainant loaned to the company did…
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