The provisions of ss. 15-25, c. 162, P. S., form a complete system of insolvency proceedings under which the property of insolvent banking institutions, trust companies, etc., may be placed in the custody of the law, to be converted into money and divided among their creditors. Brown v. Folsom, 62 N.H. 527. The appointment of an assignee of the defendants' property, March 30, 1897, under these provisions, was the *Page 623 beginning of the insolvency proceedings in this case. Moseley v. Jenness,66 N.H. 573. Thereupon, "all the estate, property, rights, and credits" of the defendants became vested in the assignee, and the corporation was practically dissolved. P. S., c. 162, s. 16; In re White Mountains Bank,46 N.H. 143; Hall v. Brackett, 60 N.H. 215, 216. In order that the proceeds of the property may be distributed among the creditors equitably (P. S., c. 162, s. 20), it is necessary that their claims shall all be allowed as of the same date. As in the case of other insolvency proceedings, this date should be the date of the beginning of the proceedings, — interest being allowed to that date upon claims bearing interest, and a rebate of interest being made upon such as were not then due and were not upon interest. P. S., c. 201, s. 13.
The insolvency proceedings did not revoke the defendants' contracts with the trustees, nor excuse the defendants from performing them. Insurance Comm'r v. Insurance Co., 68 N.H. 51. At the beginning of the proceedings, the defendants had not paid certain expenses of the trustees which, by their contracts, they had agreed to pay. The nature and extent of the trustees' claim on this account under the contract of 1894 were, considered and determined in Smith v. N.H. Trust Co., 68 N.H. 424; and the trustees should be allowed whatever sum was due them March 30, 1897, according to that decision. The insolvency proceedings disabled the defendants from performing the executory portions of their agreements in respect to these expenses, and the trustees are entitled to an allowance of reasonable damages for the breaches of contract thus occasioned. All such expenses that were incurred before the proof of the claim constitute a portion of these damages. The balance must be found from the evidence showing the probable necessity for, and extent of, future expenses. Like other questions of fact, the decision of this question must depend upon the weight of the competent evidence submitted to the tribunal.
It does not appear that the trustees have authority to make a claim in behalf of the debenture-holders for an excess of the indebtedness due them above the value of the securities pledged to the trustees for their benefit. The agreement of March 30, 1894, provides that a failure of the Trust Company to pay interest or principal, for a period of five months after the same are due, shall be deemed to be a default by the company; and, in the event of a default, the trustees shall, at the request of the holders of a majority in amount of the outstanding obligations, "proceed to collect the securities in their hands, or to sell the same at public auction," as shall be directed by such holders, and shall apply the proceeds toward the payment of the obligations pro rata; or, if the holders so elect, the trustees shall *Page 624 deliver and assign the securities to them, and the trust shall terminate. The agreement of February 1, 1886, provides that, in case of a default, the trustees shall, after thirty days, proceed to collect or sell the securities in their possession and apply the proceeds to the payment of the debentures. So far as appears, no action has been taken under these provisions. Nearly all of the securities in the possession of the trustees are held under the contract of March 14, 1894; and this contract certainly gives no authority to the trustees to agree with the defendants' assignee for a purchase of the securities, and the application of the purchase price to the payment of the debentures. If the claim of the trustees for an allowance in behalf of the debenture-holders of an excess of indebtedness above the value of the collaterals were sustained, the effect would be to transfer the equitable title of the collaterals to the debenture-holders for the price at which they were valued in adjusting the claim, and to satisfy the indebtedness to that extent. The contract of 1894 confers no independent authority upon the trustees to make such a purchase, and it does not appear that they have acquired the authority in any way. This portion of their claim should be disallowed.
The contracts give the trustees no preference in respect to their expenses except as against stockholders of the Trust Company, and except, also, so far as the payment of them is secured by the pledge of the collaterals. Smith v. N.H. Trust Co., 68 N.H. 424. The statutes give no preference in such a case except the expenses of the assignment. P. S., c. 162, s. 20. The payment to unsecured creditors of eleven per cent of their debts was made prior to the beginning of the insolvency proceedings. It is not perceived how this fact in law entitles the trustees to preference upon their claims. It does not appear but that payments of equal or greater relative amounts were made to them during the period before the insolvency proceedings were begun, while the Trust Company was under injunction. The trustees' claims to preference should also be disallowed.
Case discharged.
BLODGETT, C. J., and PEASLEE, J., did not sit: the others concurred. *Page 625