In re INTERBOROUGH REALTY CO. Petition of WOLFE

In re INTERBOROUGH REALTY CO. Petition of WOLFE. (Circuit Court of Appeals, Second Circuit. April 21, 1915.) No. 199. Bankruptcy @=>311 — Provable Debts — Bonds of Corporation. A provision in bonds of a bankrupt corporation that at maturity of the bonds, if after the corporation shall have paid its debts and 5 per cent, annual dividends on its stock, there shall remain a surplus, ,it shall be divided between the bondholders and stockholders, does not operate to defeat the right of bondholders to prove their-claims as general creditors. [Ed. Note. — For other cases, see Bankruptcy, Cent. Dig. §§ 497-500; Dec. Dig. @=311.] Petition to Revise Order of the District Court of the United-States for the Southern District of New York. This cause comes here upon' appeal from an order denying the application of Wolfe to be given preference in payment over the claims of bondholders. He is the holder of a note of the bankrupt for $4,500 which recites the deposit with him, as - collateral security for its payment, of 150 shares of the capital stock of the company. E. M. Otterbourg, of New York City, for petitioner. D. B. Simpson, of New York City, for respondent. Hamilton, Gregory & Freeman, of New York City (William H. Hamilton and Norman C. Conklin, both of New York City, of counsel), for bankrupt. Before LACOMBE, COXE, and WARD, Circuit Judges. [MAJORITY — PER CURIAM.] PER CURIAM. All the other creditors — some of them bpndholders, others contract creditors — proved their claims as general creditors. The bonds contain a provision for sharing at maturity in the net profits, and it is contended that in consequence they are to be treated as stock. Appellant relies on Cass v. Realty Securities, 148 App. Div. 96, 132 N. Y. Supp. 1074; Id., 206 N. Y. 649, 99 N. E. 1105, approved by us in Re Fechheimer-Fishel Company, 212 Fed. 357, 129 C. C. A. 33. These decisions do not cover the case at bar. The bondholders are promised only repayment of the amount of money loaned, with interest; it being further provided that at maturity, if after the corporation shall have paid all its debts and also 5 per cent, per annum on the stock, there shall be any surplus left, such surplus shall be divided between the stockholders and the bondholders. Such a provision does -not operate to defeat the bondholders’ claim to prove as general creditors for principal and interest. Order affirmed.