In re Assignment for the Benefit of Creditors of Workingmen's Publishing Ass'n

Patterson, J.: An order was made by a justice of the Supreme Court on the 30th of April, 1901, requiring the president and secretary of the Workingmen’s Publishing Association and the assignee for the benefit of creditors of that company to appear before one of the justices of the court to be examined pursuant to the order and in" reference to matters set forth in a petition upon which such order was based, and the persons to be examined were required to produce at the time and place of examination the books or accounts of the assignor, showing the amounts due to it for subscriptions,' advertisements and from other sources. The order was made upon the petition of one Kasryel H. Sarasohn, who set forth that he was a judgment creditor of the Workingmen’s Publishing Association; that that association had made an assignment for the benefit of creditors, and that certain schedules were filed; that upon an examination of the schedules the petitioner had ascertained that they disclosed debts to the amount, of something over $13,000, and assets only to the amount of $16.99. The petitioner averred that the statement contained in the schedules was false and fraudulent, and that certain assets belonging to the assignor had not been [606] included in such schedules. The examination was sought for the purpose of obtaining proof respecting the existence of such assets. The application for the examination was made under section 21 of the Assignment Act (Laws of 1877, chap. 466), which provides that such order may be made upon petition of any party interested. After the order was granted, the assignor made a motion to vacate the same, principally on the ground that the petitioner was not a creditor of the assignor within the meaning of the Assignment Act, and was not entitled to share in the distribution of the assets of the assignor. The motion to vacate was denied, and from the order entered thereupon this appeal is taken. It is urged that the petitioner Sarasohn was not a person interested in the assigned estate because his claim was founded upon a tort, namely, a claim for damages for a libel published by the assignor. The assignment was made on the 6th of March-, 1901; on the 12th of March, 1901, a judgment in favor of the plaintiff in an action to-recover damages for a libel was duly entered in the Supreme Court upon the verdict of a jury on the trial of such action, rendered on the 5th of March, 1901, the day before the assignment was made. The petitioner was, by the verdict of the jury, declared to be entitled to recover a certain sum of money against the defendant. In the assignment for the benefit of creditors of the Workingmen’s Publishing Association the assignee is directed to apply the assets to the payment of “ all the debts and liabilities now due or to grow due from ” the assignor. The argument made by the appellant is that the petitioner was not a party interested in the assignment because.a judgment in tort does not constitute a debt. It is immaterial whether it does or does not. The verdict created a liability for a definite sum ascertained upon a judicial inquiry and upon a controverted right. Upon that verdict the plaintiff was entitled to immediate judgment, and had he died before that judgment was entered, his right thereto would not. have been in anywise affected. His cause of' action would not have abated (Code Civ. Proc. §§ 763, 764), nor would -his verdict have been imperilled. A fixed liability second in degree only to an actual judgment existed, and the petitioner was .entitled to the recognition by the assignee of his right under ■ the very words of the assignment as above quoted. [607] It is not to be. inferred from the petition and the papers in support of the order that the attitude taken by the petitioner is in hostility to the assignment and as a consequence an examination should not be ordered. By taking this proceeding the petitioner binds himself to the assignment (Matter of Holbrook, 99 N. Y. 546), and the examination is thus in aid of the assignment and may be made the basis of efforts to bring assets into the possession of the assignee which are withheld from him either with Or without his connivance. The order denying the motion to vacate was properly made and should be affirmed, with ten dollars costs and disbursements. Van Brunt, P. J., O’Brien, Ingraham and Laughlin, JJ., concurred. - Order affirmed, with ten dollars costs and disbursements. Note.— The rest of the cases of this term will he found in the next volume, 63 App. Div.— [Rep.