I concur in the conclusion that the two reserved questions should be answered in the negative and that the claim of the Branco Estate upon the four promissory notes is not a preferred claim against the defunct corporation which was the executor of his estate and is to be paid under the provisions of paragraph "5th" of section 3488, R.L. 1925.
The section just referred to prescribes the order in which the assets of a trust company which is being wound up shall be distributed in the payment of its debts. The claims are divided into five classes. It is not contended by any of the parties in this case that the claims of the Branco Estate come within the definition of either the first or the second class. Under the third class the direction is that the assets of the company shall be used in "the payment of all other fiduciary obligations of such corporation, including moneys received on trust account and obligations incurred while acting in a fiduciary capacity by appointment of individuals under wills, trust deeds or otherwise." It need hardly be said that in the construction of statutes the language used is to be given its ordinary every-day meaning unless something in the context requires some other interpretation to be attributed to it. The word "received" in its ordinary acceptation imports an actual receipt as distinguished from that which has never in fact been received at all and can be regarded as having been received only by resort to a fiction. There is nothing in this subsection or in any other part of this statute tending to show that the word was here used as including moneys which *Page 244 never came into the possession of the corporation but which only under a fiction of the common law the corporation is to be deemed to have obtained. In so far as the expression "including moneys received on trust account" is concerned it seems to me that the reference of the statute is purely to moneys which were actually received by the executor or other trustee. It is clear that, when the moneys were originally borrowed by the corporation from Manuel Branco and the promissory notes were given therefor, the relation created between the two was that of debtor and creditor. No trust relationship arose at that time. There was no entrusting of the moneys by Branco to the corporation for holding or for investment or for any other trust purpose.
The other class of debts expressed to be included under the paragraph marked "3rd" of the same statute is "obligations incurred while acting in a fiduciary capacity." The obligation to repay the notes was in reality incurred not while the Security Trust Company was acting in a fiduciary capacity but long before its appointment as executor.
As above stated the relation created was that of debtor and creditor. Assuming without deciding that the common-law fiction relating to "realized assets" is law in Hawaii, it was not that fiction that created the obligation of the trust company to repay Branco. That obligation arose in the beginning when the money was borrowed. The fiction was devised in order to aid in the enforcement of the collection of moneys due from fraudulent or careless executors to the estates of decedents and cannot in any event, even if it is law in Hawaii, be considered as being the cause or the means of the "incurring" of the obligation in question.
One result of the application of the common-law fiction to this case would be that bona fide creditors of the corporation, *Page 245 beneficiaries of fiduciary obligations clearly falling within the class mentioned in paragraph marked "3rd" of the statute, would be injured in that their rights of recovery against an insolvent corporation would be lessened by the placing in the same class of a claimant in the position of the Branco Estate which would not come into the same class except by the employment of the fiction. Certainly the common-law fiction was not intended for any such purpose or to have any such result. In interpreting a modern statute providing for the distribution of the assets of a trust company of recent origin and development, the court should not indulge in this fiction of the common law which was not created for or had any proper reference to such a subject. Realities and not fictions are what the legislature evidently had in mind in enacting the provisions of the statute under consideration.
If the fiction is not law in Hawaii the moneys in question clearly were never received on trust account; and the only argument which is advanced — the only argument which can be advanced — to bring the claim within the preferred class named in sub-paragraph 3 is that by resort to the fiction the moneys must be deemed to have been received and on trust account. The ordinary meaning of the word "received," the absence of any indication in the words of the statute of an unusual meaning and the view based on these considerations that the legislature had in mind actualities and not fictions sufficiently dispose of the whole claim of preference.
I concur also in the view that the three notes in question are not "bonds, debentures or other secured debts of the corporation." *Page 246