and resumed banking operations on May 7, 1934. The defendant's answer alleged its reorganization by which it had raised additional capital by the issuance of preferred stock which had enabled it to pay fifty per cent to depositors, and the balance in stock and participating certificates, including plaintiffs'. Although plaintiffs had not consented to the plan of reorganization, the court held that they were estopped from contesting its validity because they had accepted the benefits derived therefrom.
A similar conclusion was reached in the case of Newman v. Asbury Park & Ocean Grove Bank, 120 N.J.L. 122, 198 A. 286. Therein, the plaintiff, trustee, had money on deposit with the defendant bank which had been closed by the Commissioner of Banking and Insurance. During liquidation plaintiff received a dividend on the deposit. Following the resumption of defendant's normal banking operations pursuant to a plan of reorganization, plaintiff demanded the balance of the deposit in full. Recovery was denied on the ground that plaintiff had received payments from the bank and by his inaction permitted a new situation to arise in which case it was too late for him to complain when he had availed himself of none of the remedies provided by law. In addition, the court examined the plan adopted by defendant and found it fair and equitable.
Defendant relies on these cases for the proposition that plaintiff cannot now make claim against it. Plaintiff makes the following distinctions: In the case of Basen v. Clinton Trust Company, supra, the plaintiffs were estopped because they received a portion of the deposit out of funds created by the reorganization; in the case of Newman v. Asbury Park & Ocean Grove Bank, supra, the court found the proposed plan was fair and equitable. To these, plaintiff adds that there can be no estoppel against her because there was a failure upon defendant's part to disclose that certain correspondent banks and the Reconstruction Finance Corporation were given a preferred status and the management of the bank became possessed of common stock in the reorganized company, in which case even if plaintiff had expressly assented to the plan of operations she could have repudiated. Accordingly, it is contended that plaintiff herein is not estopped because she has received no benefit from funds created by the reorganization, because there was not a full disclosure in the plan of reorganization, and because the plan is, in fact, unfair and inequitable.
Regardless of the source out of which plaintiff received payments, the fact is that these payments were made pursuant to the plan of reorganization. A new situation has arisen thereunder; the rights of numerous creditors have been readjusted, and the defendant itself has spent several thousand dollars as well as considerable effort in effecting a plan of reorganization. The relief requested, if granted, would not only dislodge the rights of all creditors and hamstring defendant's efforts and expenditures, but would elevate plaintiff's position above all others. We do not feel that the status quo can be disturbed now, due to plaintiff's failure to act promptly which can only be construed as implied assent to the plan.
The plan to which this implied consent was given was a conventional one conditioned upon statutory requirements for approval. It was supported in writing by eighty per cent of the creditors whose deposits ran into the millions of dollars, and this plaintiff solely has expressed her dissatisfaction in suit. Reference is made to this only to indicate that the plan must have been considered fair and equitable by nearly one hundred per cent of all the creditors.
The contentions that there was a failure to disclose the plan in its entirety, and that the old management of the bank wrongfully gained possession of common stock in the reorganized bank are without merit. Plaintiff has failed to impress us that any fraud was committed under these allegations. The preferred stock must be redeemed in full and cumulative dividends must be paid before the common stockholders are entitled to dividends. The preferred stockholders in turn were given an option to convert their preferred holdings into common stock. We do not know when plaintiff acquired knowledge of the alleged secret preferences, and again the timeliness of the attack is relevant. Furthermore, the checks evidencing payment of dividends to plaintiff pursuant to the plan of reorganization bear dates subsequent to the filing of the complaint. Therefore, we are constrained to the conclusion that the acceptance of these checks was with knowledge of the alleged concealment.
Finally, we can see no substantial distinction between the plan of reorganization effected in this case and those that have been considered by the courts in the cases of Basen v. Clinton Trust Co., 115 N.J.L. 546, 181 A. 67; Newman v. Asbury Park & Ocean Grove Bank, 120 N.J.L. 122, 198 A. 286; McSweeney v. Equitable Trust Co., 198 A. 529, 16 N.J.Misc. 193. In any event it becomes unnecessary for us to rule on the constitutional points raised by plaintiff because we feel she effectively waived her privileges in those respects.
Judgment will therefore be given in favor of the defendant.
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