In Re the Assignment of Farnam

Folger, J. First: The first point made is, that the petitioner has not established, by a judicial proceeding against the assignee, that she is a creditor of the estate. She avers in her petition that she is a creditor. The assignee, in his answering affidavit, denies it. lie claims that this denial ousts the county judge of jurisdiction, and that the petitioners must, by a suit or proceeding aliunde, establish the validity *190 of her claim against the estate and her ownership of it. This point is not tenable. The petition was presented to the county judge in 1876. As the law then stood, the county judge had power, upon the petition of any creditor, to compel an assignee in trust for the creditors of an insolvent debtor, to appear and show cause why an account should not be made. (Laws of 1860, chap. 348, p. 595, §4.) The petition in this case did aver that the petitioner was the creditor of the assignor, and it was duly verified. This was enough, on that head, to give jurisdiction. We have just held in Whittlesey, Rec’r, etc., v. Frantz, * that such an averment, in a petition for the appointment of a receiver of an insolvent corporation, is to be taken as true for the purpose of preliminary jurisdiction ; and that though it may be denied, and the truth of it contested, so long as it remains undisproved it is a sufficient basis of jurisdiction. The affidavit of the assignee does here deny the truth of the averment; but that has no more effect than to liiake an issue for the county judge to hear, try and determine. The bare allegation of the affidavit does not, of its own force, destroy the averment of the petition and oust the county judge of jurisdiction. Second. Nor was it necessary for the petitioner to profess, in her petition, that she came before the judge in behalf of all the other creditors, as well as herself. The statute makes not that requirement. The county judge is authorized to act upon the petition of any creditor. (See section above cited.) Third, The fact that the assignee did not give the bond, as required by law, does not, upon an allegation that he has converted it to his own use, shield him from a liability to show ivhat has become of the property which went into his hands. Though no bond was given, in the time named in the act, the property passed to the assignee and became vested in him. (Thrasher v. Bentley, 59 N. Y., 649; S. C., 1 Abb. [N. C.], 39, Syracuse R. R. Co. v. Collins, id., 47; Brennan v. *191 Willson, 4 id. 279, in which last case Rathbone v. Juliand, 39 N. Y., 375, is discussed.) He was the assignee of it, though forbidden to sell or dispose of it to the purposes of the trust, until he had given a bond. And if he has never given a bond, and yet has disposed of the property in any way, he is liable to show how, and to account'for it. Fourth. The petition avers that the assignment was made and filed, and inferentially avers that it was delivered. It avers that Hopkins entered upon the execution of the trusts, and took possession of the trust estate, and has sold and disposed of a large amount of the property assigned. His affidavit avers that the assignment was executed to him, and' sets up matter to the effect that he did not accept the trust under the assignment, but took the property of "the debtor by appointment of the creditors. This averment must be taken as raising an issue, and no more. It presents a question for the determination of the county judge. It would never do, that on a petition being presented, on which to base an order for an accounting in these cases, the pursuit of it could be thwarted by the mere making and filing of an affidavit, denying the averments of the petition and setting up affirmatively matters, which, if shown to be true, would establish that no case for an order existed. Such affidavit must be looked upon in the light of a pleading, and as having the effect of only presenting an issue. The matters thus alleged, and denied or avoided, must be first looked into by the county judge. If it appears that he has not jurisdiction, the petition will be denied. But if it appears that there is an assignee, and that he is liable to account, the county judge wilTgo on with the accounting. The order should be affirmed. " All concur, except Miller and Earl, JJ., absent at argument. Order affirmed. Footnotes [*] 74 N. Y., 456.