Maack v. Maack

Bradley, J. The plaintiff, a judgment creditor of John H. Maack, brought this action to set aside the assignment made by the latter for the benefit of his creditors to the defendant John F. Maack, and charges that it is upon its face fraudulent and void as against such creditors, and that it is rendered so by the provision in it, which is as follows: “And whereas, the said party of the first part has been carrying on a grocery and feed store in said village of Little Valley, and is owing divers bills for goods sold to him-in said business, and the party of the second part símil pay and discharge, and pay in full, all debts due or to became due for goods sold to the party of the first part in said grocery and feed business, the particular items of which the party of the first part is now unable to mention.” The purpose of this provision appears to have been to prefer the class of creditors mentioned. The contention on the part of the plaintiff is that, as a preference, the direction to-make payment is void for uncertainty, that it vests an unauthorized power in the assignee to determine who are entitled to the benefit of it. The power of the assignee depends upon the direction and authority given by the assignment. The distribution of the assets must be made as the assignor, by the-instrument, may have directed, and the assignee cannot depart from it, (In re Lewis, 81 N. Y. 421;) and any attempt, by provision to that effect, to delegate to the assignee power to determine or make future preferences, or any discretion in that respect, would, as against the creditors, vitiate the assignment, and the effect would be the same of a provision preserving to the assignor the right to designate future preferences. The rights of the creditors in that respect must be fixed by the terms of the assignment, and so settled as to be ascertainable and ascertained by its provisions, and as to enable the assigneeto execute the trust. Boardman v. Halliday, 10 Paige, 223; Sheldon v. Dodge, 4 Denio, 217; Frazier v. Truax, 27 Hun, 587 The right of creditors, is to have the property of the insolvent debtor unqualifiedly appropriated to. [507] the payment of his debts; and any power by the terms of an assignment in trust for the benefit of creditors (except such as is necessarily incident to its execution) which enables the assignee to delay its execution, or which vests him with discretion in that respect, renders it void as against them. Jessup v. Hulse, 21 N. Y. 168; Rapalee v. Stewart, 27 N. Y. 310; McConnell v. Sherwood. 84 N. Y. 522. The creditors embraced within the provisions of preference in question are described as a class, and not by name. They are those to whom the assignor was owing for goods sold to him in his grocery and feed business, which he had been carrying on in the store operated by him. The objection is that because ttiose creditors and the debts in view were without any other designation in the assignment to guide the assignee, the matter of determination what were such debts, and who were such creditors, was left to the judgment and, in some sense, the discretion of the assignee. The question for him is one of identity, which in a greater or less degree not unfrequently arises, and imposes upon such a trustee the necessity of ascertaining,, by the best available means of information, the identity of persons who may he entitled to payment, and of the debts which the execution of his trust requires him to pay. There is no apparent legal objection going to the validity of an assignment merely because it describes preferred creditors as a defined class. In Bank v. Talcott, 22 Barb. 550, the assignment by way of preference directed the assignee to pay to the laborers and workmen of the assignors-residing in Albany and Buffalo the amounts due them, respectively, for work, labor, and services done and performed for the assignors. This was held to be a valid provision of preference, and the assignment was supported. And the statute has inserted into every assignment for the benefit of creditors a. provision preferring the wages or salaries owing to the employes of the assignors at the time of the execution of the assignment, (Laws 1884, c. 328,). although such provision, or any reference to such creditors, may not in fact he expressed in such instrument. Richardson v. Thurber, 104 N. Y. 606, 11 N. E. Rep. 133; Burley v. Hartson, 40 Hun. 121. The like duty is placed upon the assignee to ascertain, distinguish, and discriminate as to the creditors and nature of the debts preferred in those cases as in that in question. And this burden was assumed by him in the acceptance of the trust. The difficulty of executing it bears upon the measure of responsibility assumed,, rather than upon the question of validity of the trust conferred upon him. And therefore the provision referred to cannot be said to have the effect to hinder and delay the creditors in the collection of their debts, in the sense-which those term’s are used in their application to the transfer by a debtor of his property. Human methods may not be perfect, nor is the testimony of witnesses always so. The execution by the assignee of his trust, and the manner in which he has performed his duty, may be the subject of judicial inquiry and review, upon which the creditors to whom he is responsible can be heard. There seems to be no occasion to disturb the conclusion of the trial court. The judgment should be affirmed. Haight and Dwight, JJ., concur.