English Bank of Rio de Janeiro v. Barr.

rated and executed a carefully worded contract establishing peculiar relations, declaring the title in the banker and acknowledging the trust obligations of the borrower, which contract it was their intention at the very moment of execution to disregard, and under which their relations were to be fundamentally different from those which they were so careful to define.

I am thus led to the conclusion that the plaintiffs are entitled to the relief they ask for, and findings may be prepared in consonance with these conclusions.

The assignee makes application for the payment of his commissions as such assignee out of the funds in question, and for an allowance to his counsel in the defense of this action. By the stipulation of counsel this. question is also submitted to me for decision in lieu of an application to the court. It appears that subsequent to his appointment and qualification as assignee the deposit with the defendant bank was changed to the credit of the assignee before the commencement of this action. It was the right and the duty of the assignee to require establishment of the plaintiffs' claims at law. This duty he has performed with discretion and fairness. No vexatious or unreasonable defense has been made by him; he has performed his duty to the trust he represents, but has not been captious or obstructive in so doing. It is agreed by counsel that the amount of his bond was influenced by this deposit; that he has had responsibility respecting the latter, and has defended the action in good faith. His counsel has represented the interests of the assignee and the creditors with fidelity, care and learning, and has devoted much attention and labor to the case. As the plaintiffs came into this court of equity for its favor and relief, the court has power to require them to do equity.

It seems to me just that the assignee should be compensated out of the fund to a fair and reasonable degree both for his own services and that of his counsel. This sum under all the circumstances, I think should be fixed

Dennistown v. Barr,

at $1,250 to cover such compensation, and $1,250 to cover his counsel fees and his expenses herein.

The assignee has also expended $120.77 in and about the property in question, which he should be reimbursed. A statement of the details of this sum was submitted, and I make reference to it. He has realized $859.14 from the sale of skimmings of the coffee in question, in addition to the sums already accounted for. He should be reimbursed said expenditures, and should pay over said further collections.

Let findings be prepared in consonance with these views.

DENNISTOWN v. BARR.

N. Y. Supreme Court, First District, Trial before CLIFFORD A. HAND, Referee; July, 1893.

1. Sales.] A merchant obtained from a banker letters of credit for the purchase of coffee by bills of exchange drawn upon the bankers, accompanied by bills of lading in the banker's name. The bills of lading were subsequently endorsed by the banker to the merchant upon a special agreement that the latter should hold the coffee as the property of the banker with liberty to sell the same, and on such sale to pay over the proceeds to the banker until the bills of exchange for the purchase money were paid.-Held, that the title to the coffee remained in the banker until the merchant had repaid him, and that he was entitled to the coffee or the proceeds of such of it as had been sold as against the merchant's assignee for the benefit of creditors. 2. Costs; in Discretion of Court.] In an action to recover the proceeds of property claimed by plaintiff in the hands of an assignee for the benefit of creditors which had not been intermingled with the assigned estate, held, that upon judgment for plaintiff, the assignee could not be allowed commissions and counsel fees out of the fund, although he had asserted what he supposed to be his right to it as assignee in a way to avoid, as much as possible, prejudicing plaintiff's rights.

Dennistown v. Barr.

Trial before referee.

Action by Alexander Dennistown and others against Thomas M. Barr and others, composing the firm of Thomas M. Barr & Co., and Frederick T. Sherman, the assignee for the benefit of creditors of said firm, to recover the proceeds of certain shipments of coffee. The further facts are fully stated in the opinion.

Carter & Ledyard, for plaintiffs.

for defendants.

CLIFFORD A. HAND, Referee.-The facts in this case are free from dispute and are reducible to simplicity of statement. In order to obtain funds for the purchase of coffee in Brazil, Thomas M. Barr & Co., New York merchants, obtained from the plaintiffs, London bankers, through Mosle Brothers, their New York agents, two letters of credit, authorizing the correspondents in Brazil of Thomas M. Barr & Co. to use the credits for the purchase of the coffee, by bills of exchange drawn by them upon the plaintiffs, accompanied by invoices and bills of lading. These bills of lading were to be in the name of the plaintiffs as consignees. In obtaining the letters of credit from the plaintiffs, Thomas M. Barr & Co. agreed, among other things, to supply the New York agents of the plaintiffs with funds, to meet the plaintiffs' acceptances of the bills of exchange, at least fifteen days prior to their maturity, together with their commission of three-fourths of one per cent., which was the stipulated compensation to the plaintiffs for the use of the credits. Accordingly, two thousand bags of coffee were purchased in Brazil and shipped by the steamer" J. W. Taylor," and in due course the bill of exchange, drawn against it, was accepted in London by the plaintiffs, who received the accompanying invoice and bill of lading. Afterward another two thousand bags of

Dennistown v. Barr.

coffee were in like manner shipped by the steamer “Nasmyth," with a like acceptance of the bill of exchange drawn against it, and the like receipt by the plaintiffs of bills of lading.

These bills of lading were forwarded by the plaintiffs to their New York agents, who endorsed and delivered them to Thomas M. Barr & Co., upon special agreements, called red letter receipts, whereby Thomas M. Barr & Co. acknowledged receipt of the coffee from the plaintiffs' New York agents, Messrs. Mosle Brothers, and agreed with the latter to "hold the same on storage as their property with liberty to sell the same, and on such sale to pay over or deliver the proceeds to them until the bills of exchange drawn on Messrs. Dennistown, Cross & Co., of London, for the purchase money of the said goods shall have been remitted for by us or satisfactorily provided for by us,"

"the intention of this undertaking being to protect and preserve unimpaired the ownership of Messrs. Mosle Brothers in the said property." Thomas M. Barr & Co. thus obtained possession of the coffee subject to or upon the terms of.these red letter receipts. They sold both cargoes to the Central American Trading Co., Limited, upon terms requiring the purchaser to pay, as the purchase price, whatever should become due from Thomas M. Barr & Co. to the plaintiffs to meet the acceptances. Of these acceptances the latest day stipulated for provision of funds, in New York, by Thomas M. Barr & Co. to meet the acceptances against the coffee by the “J W. Taylor," was the 13th day of May last and the latest day for the coffee by the "Nasmyth" was the 17th day of June last. On or about the 18th day of April last, Thomas M. Barr & Co. failed and made an assignment to Frederick T. Sherman as assignee for the benefit of their creditors. On the day of this assignment the New York agents of the plaintiffs called upon the assignors and the assignee for the proceeds of the coffee, but failed to obtain them. In the confusion of the occasion Thomas M. Barr & Co. were

Dennistown v. Barr.

uncertain to whom the coffee by the "Taylor" had been sold, and whether and to what extent it had been paid for, and declared their inability to respond to the call. The assignee stated that, in so far as he was able to distinguish the proceeds of the sales of the coffees, he would keep them separate, until it could be decided to whom they belonged. But he did not offer or consent to otherwise put the plaintiffs in possession of the proceeds.

This action was therefore immediately commenced with a view to obtain possession of the proceeds of the coffee, or to have them placed in the custody of the court. Shortly after the commencement of the action, and after it was ascertained that the Central American Trading Company was the purchaser of all the coffee, and had made no payment on account of the purchase money, a stipulation was entered into to the effect that the Trading Company might deposit, with the Central Trust Company of New York, the purchase price of the coffee from both the steamships, and that such deposits should be to the credit of this action in separate accounts, one for the coffee from the " Taylor," and the other for the coffee from the "Nasmyth," and should be withdrawn only pursuant to an order of the court in the action. Under this stipulation the Trading Company deposited with the Trust Company various sums, intended to be sufficient to cover the requirements of the plaintiffs on their acceptances, and the disposition of these deposits, as well as the other rights and liabilities of the various parties, remain to be considered.

The use, by merchants, of bankers' credits is an important element of the conduct of commerce, and is calculated to present, from time to time, questions of no little nicety. But arrangements and agreements, such as we find in the present case, have been construed so recently and so fully by the court of appeals that we have rules for our guidance which can be safely followed (See Drexel v. Pease, 133 N. Y. 129; S. C., 129 Id. 96; Moors v.