De Peyster v. American Fire Insurance

Citations

• 6 Paige Ch. 486
• 1837 N.Y. LEXIS 235
• 1837 N.Y. Misc. LEXIS 41

Syllabus

<p>A creditor of an insolvent corporation, whose debt accrued by reason of a loan to the company to pay a loss which had occurred previous to the calamity which rendered the company insolvent, is not entitled toa preference in payment out of the funds which the company held beyond their capital stock at the time of such calamity.</p> <p>No creditor of an insolvent corporation is entitled to a preference in payment, unless he has a prior legal or equitable lien on or a specific appropriation of some particular part of the corporate property or funds.</p> <p>The creditors of an insolvent insurance company are not limited in their claims against the company to the amount of the capital stock of the corporation at the time when their several losses occurred ; but they are entitled to he paid out of any funds of the company not otherwise specifically appropriated.</p> <p>The capital stock of an insurance company is not the primary fund for the payment of losses which may accrue upon property insured. The premiums received for insurance, and the interest on the capital stock, constitute the primary and natural fund for the payment of the debts and losses of the company; and the capital stock can only be resorted to when this primary fund is found tobe insufficient.</p> <p>The unearned premiums received by an insurance company on which the risks are still running are not surplus profits of the company, out of which dividends can be legally made among the stockholders, without leaving a sufficient surplus on hand to meet the probable losses upon risks then assumed and not yet terminated, independent of the capital stock of the corporation.</p>