Opinion
Submitted May term, 1939.
Decided October 16th, 1939.
1. Appellant, the maker of the bonds in question, was not entitled, as the holder of unissued and reacquired bonds, to share pro rata with the holders of outstanding bonds, in the proceeds of the collateral security, notwithstanding the plan of reorganization adopted in pursuance of chapter 116, as amended by chapter 287 of the laws of 1933. R.S. 1937, 17:8-1 et seq. It is only entitled to receive the surplus after the other bondholders are paid in full. Howell v. Bartlett, 124 N.J. Eq. 544, affirmed on this point.
2. In this view, there is no occasion to determine whether the plan of reorganization was adopted in accordance with the statute adverted to, and therefore was effective to discharge the appellant's primary debtor's obligation as to non-assenting bondholders. It was not otherwise within the issue, so that the decree should be reversed in this respect.
On appeal from a decree in chancery advised by Vice-Chancellor Stein, whose opinion is reported in 124 N.J. Eq. 544.
Mr. John P. Kirkpatrick, for the appellant New Brunswick Trust Company.
Mr. Warren R. Schenck, for the appellant trustees of estate of Peter Fisher, deceased.
Messrs. Child, Riker, Marsh Shipman ( Mr. Irving Riker, of counsel), for the appellant trustees of estate of Edwin A. Fisher, deceased.
Mr. Horace E. Barwis ( Mr. William D. Danberry, of counsel), for the petitioners-respondents and cross-appellants Russell B. Howell, Joseph H. Lee and George D. Ziegler, trustees, c.
Mr. George S. Silzer, for the respondents Leah B. Mack et al.
The issue framed by the pleadings was whether appellant New Brunswick Trust Company is entitled, as the holder of the unissued and reacquired bonds, to share pro rata with the holders of the outstanding bonds in the proceeds of the collateral security; and we concur in the view of the learned vice-chancellor, as expressed in his opinion and embodied in the decree, that the obligation of the named Trust Company, as the maker of the bonds, was "primary and direct," and that, notwithstanding the plan of reorganization adopted in pursuance of what it conceived to be the power bestowed by chapter 116, amended by chapter 287, of the laws of 1933 ( P.L. pp. 241, 770; R.S. 1937, 17:8-1 et seq.), it "is not entitled to share pro rata in the liquidation of the collateral," but "is only entitled to receive the surplus after the other bondholders are paid in full."
But, in this view, there is no occasion to determine whether the plan of reorganization was adopted "in accordance with" the statute adverted to, and therefore was effective to discharge the Trust Company's primary debtor's obligation as to non-assenting bondholders. It was not otherwise within the issue, and so we think the decree in this respect should be reversed.
And we are of the opinion that, in the particular circumstances, there was no abuse of discretion in the denial of a counsel fee to the trustees of the estate of Peter Fisher, deceased.
The decree is accordingly modified, and, as so modified, affirmed; and the cause is remanded for further proceedings in conformity with these views.
For modification — THE CHIEF-JUSTICE, PARKER, CASE, BODINE, DONGES, HEHER, PERSKIE, PORTER, HETFIELD, DEAR, WELLS, WOLFSKEIL, RAFFERTY, HAGUE, JJ. 14.