The distribution of the special fund deposited for the benefit of registered policies is to be controlled by the statute rather than any general rules of equity. The latter may help our judgment, but cannot displace the terms of an express trust, or of a specific enactment. The issue, protection and ultimate payment of registered policies is regulated by statute. (Laws of 1869, chap. 902.) It dictates the proceedings in cases of insolvency, and defines very clearly the duty of the superintendent and the receiver. The former is required to convert the securities deposited into money, and pay over the proceeds to the latter, who is thereupon to apply such proceeds to the payment of registered policies and annuities in proportion to their net value. The statute further provides that any surplus remaining, if any there be, "with all the other assets of the said company, shall be then applied to the payment of all the just debts of said company." The purpose of this provision is quite plain. The deposit, converted into money by the superintendent, and paid over to the receiver, is to be first applied by the latter "to the payment" of the registered policy-holders and annuitants. That application extinguishes in whole, or in part, the claims of the latter. If, as in the present case, the special fund does not yield enough to pay in full, the balance unpaid, and that only, remains as a debt against the company. The policy is the latter's contract and covenant, none the less so because specially protected and secured; and, after the exhaustion *Page 488 of the special deposit, the balance remaining is a general and unsecured debt as yet undischarged. The special deposit having been exhausted, and the balance of debt ascertained, it is provided for by the final provision that the remaining assets are then "to be applied to the payment of the just debts of the company." Such balance becomes one of those "just debts," and to its amount, and upon that basis, is entitled to share in the distribution of the general assets.
The principle which guided the distribution of the $100,000 deposited with the superintendent of insurance, as a prerequisite for doing business, was settled by the General Term, and acquiesced in without an appeal to this court. It cannot serve as a precedent to control our conclusion. Nor is there any thing in our previous ruling in this case* which contravenes our present determination. The question now here was not then raised or argued, and we cannot see that it was even incidentally involved. The two points to which our attention is directed related to entirely different questions. In one of them, the inquiry was as to the relative rights of registered policies among themselves where some had matured by the death of the insured. In the other, unregistered policies which had been taken in exchange for registered policies were shut out from a share of the registered fund, and we did not find it necessary to pass upon the preference given them in the general fund.
The question of expenses, and how they should be borne, was not raised or considered below, and, therefore, furnishes nothing for us to review.
We think the case was properly decided, and the order of the General Term should, therefore, be affirmed, with costs to the receiver to be paid by the appellants.
All concur, except FOLGER, Ch. J., absent.
Order affirmed.
* See 82 N.Y. 172. *Page 489