Turney v. Van Gelder

FOLLETT, J. The respondents insist that the judgment and ■the order discharging the assignee, entered in the action brought by Jones, are a bar to this suit, and cite, in support of their position, Kerr v. Blodgett, 48 N. Y. 62. Kerr’s Case was an action brought to compel the 'assignee to account. A previous action had been 29 begun in the same court for the same purpose by a creditor, in his own behalf, as well as in behalf of all others similarly situated. A decree was entered in the first action, and a report was made, which was confirmed. before Kerr’s action was begun. It was held that, both actions being for the same purpose, the second action could not be maintained. The facts in Kerr’s Case are more fully reported in 16 Abb. Pr. 137, and 25 How. Pr. 303. The case at bar does not ask for the same relief that, was sought in the action brought by Jones,—an accounting,—but seeks to have the assignment set aside as fraudulent. The action of Jones was in aid of the assignment, and the relief which this plaintiff seeks could not have been given in it. The order discharging the assignee has no greater force than the judgment on which it rests. The respondents also insist that the plaintiff cannot maintain this action because he verified and filed his claim with the assignee, and in support of this position they cite Cavanagh v. Morrow, 67 How. Pr. 241; Wilson v. Daggett, 9 Civil Proc. R. 411; and McLean v. Prentice, 34 Hun, 504. Cavanagh’s Case was brought to set aside an assignment as fraudulent. The plaintiff in that action had filed his claim with the assignee, and appeared on the accounting' in the court of common pleas, and interposed objections to the assignee’s account. The account and objections were referred to a referee, who made his report. It was held that Cavanagh, having filed his claim and participated in the accounting, had elected to take under the assignment, and could not afterwards maintain an action to set it aside. In the case at bar the court did not find that the plaintiff took part in the accounting, but simply that he verified and filed his claim with the assignee before action for accounting was begun. In Wilson v. Daggett it was held that a creditor who had filed his claim, and proved it, in proceedings for an accounting pending in the common pleas, could not maintain an action to set aside the assignment. Precisely what was done by the creditor on the accounting does not appear in the report of the case. No action was pending to set aside an assignment, the question being whether the examination of the assignor in proceedings supplementary to execution should be limited to trans: actiqns since the assignment. The question now under considera tian was not involved in that case. In McLean v. Prentice it was held that an action brought several months after the assigned estate had been distributed under the decree of the court could not be maintained. In Schofield v. Scott, (Sup.) 3 N. Y. Supp. 496, it was held that filing a claim after an action had been brought to set aside an assignment as fraudulent was not a defense to the action. Whether a creditor who has verified and presented his claim to an assignee can thereafter commence and maintain an action to set aside an assignment as fraudulent does not seem to have been decided, and, under the facts as found in this case, it is not necessary now to determine the question. The court found that the assignment was not fraudulent in fact. The facts relied upon by the plaintiff as evidence of fraud were that the assignors were employed by the assignee to get the unmanufactured stock ready for the market. 30 and were for the purpose left in the possession of the assigned estate, and that the assets of the estate brought but about 50 per cent, of their actual value, as stated in the inventory. The evidence is that the property, in the condition that it came into the hands of the assignee, was of little value, and not marketable until it was manufactured into the article for which it was designed. The goods, consisting of skins, were made into “hat sweats” by the assignors for the assignee, .and, when sold, the avails were deposited to the credit of the assignee in a separate account. There is no evidence that the assignors derived any personal benefit from their employment, or that there was any understanding, previous to the assignment, that they should be employed. They received no compensation for their services, but were allowed to use the machinery to manufacture from new stock furnished them by friends. By the inventory the assets were estimated to be of the actual value of $8,585.86, but they brought only $4,433.21. It is argued that this is evidence of fraud, but there is no evidence that any of the property was wasted, or that any was sold for less than its value. The court found, upon undisputed evidence, “that as soon as the stock of the assigned estate had been disposed of, and in about the month of March, 1888, the assignee sold at auction the machinery, fixtures, furniture, and all the remaining unmarketable assets of the assigned estate; that said sale was openly, fairly, and duly made through Messrs. Mallaby & White, auctioneers, and the property was duly struck off to the highest bidder; that thereafter the said assignee sold at public sale the undivided estate of Henry Van Gelder, consisting of six lots of land at Ft. Lee, New Jersey, to Benjamin W. Jones, for $200, he being the highest bidder at such sale; that the course pursued by the assignee in the disposal of the stock and assigned estate was in the best interest of the creditors.” There is no evidence tending to show that these sales were not duly advertised and fairly conducted, nor that any of the property was sold for less than its value. The fact that this property was bid in by third persons in the interest, and for the benefit, of the wife of one of the assignors, is, in the absence of evidence that the sale was collusive, or that the property brought less than its worth, but slight, if any, evidence that the assignment was made with a fraudulent intent. There is no evidence that Mrs. Van Gelder did not pay the full value of the property from her own means. If she did, she had the same right to purchase that any person had. We think that the finding that the assignment was made in good faith, and not with intent to defraud creditors, is sustained by the evidence, and the judgment should be affirmed, with costs. All concur.