Armour v. Gold

Mr. Justice Windes delivered the opinion of the court. Appellants contend that the “ consents signed by the creditors were unlawfully procured; were not the voluntary acts of the signers thereof; were consequently void, and the order entered in pursuance thereof was unauthorized.” Sec. 15 (Ch. 11) of the act relating to voluntary assignments in this State is as follows: “All proceedings under the act of which this is amendatory may be discontinued upon the assent, in writing, of such debtor, and a majority of his creditors, in number and amount; and in such case all parties shall be remitted to the same rights and duties, existing at the date of the assignment, except so far as such estate shall have already been administered and disposed of; and the court shall have power to make all needful orders to carry the foregoing provisions into effect.” (Hurd’s Stat. 1897, p. 174.) The power of the County Court relating to the discontinuance of proceedings therein involving voluntary assignments has been several times considered by this court and also in the Supreme Court. The cases in this court need not be referred to, as we are of opinion that the Supreme Court decisions are such as to control the case at bar. The following are the Supreme Court cases referred to: Howe v. Warren, 154 Ill. 227; Terhune v. Kean, 155 Id. 506; Am. Exch. Bk. v. Walker, 164 Id. 135 ; Stoddard v. Gilbert, 163 Id. 131; Kelley v. Leith, 176 Id. 311. The first four of these cases announce the doctrine, in substance, that any scheme or device by which the unadministered estate of the debtor is disposed of in procuring the assent of a majority of creditors to the discontinuance of the assignment proceedings, is a direct violation of the spirit and letter of the statute and a fraud upon the minority creditors; also that the statute contemplates that all creditors of the estate shall stand upon the same footing, and that the rights of all the creditors, as they existed at the date of the assignment, are to be restored when the proceedings are discontinued, except in so far as the insolvent estate shall have already been administered and disposed of by the County Court. In each of those four cases referred to, the property was not returned to the insolvents, and all the creditors were not remitted to the same rights and duties as existed at the date of the assignment, except in so far as the estate had been previously administered; but the remaining insolvent estate, in each case, immediately, on the discontinuance of the assignment proceedings, was given over to some third party or to a trustee, under an arrangement which deprived certain creditors of their legal right to resort to it for the payment of their claims. It was not returned, and the title and possession thereof reinvested in the insolvents. * In the Kelley case, supra, the Supreme Court review all the above cases, except the Stoddard case, distinguish them from the one then under consideration, and say: “ In the absence of fraud connected with the procurement of the assent of a majority, in number and amount, of creditors petitioning for such discontinuance, the above statute fully authorizes a County Court to discontinue such assignment proceedings, upon compliance with its provisions. “ In this case the original debtors, by an order of discontinuance entered by the County Court of Cook County, were reinvested with the title and possession of all of their property as fully and to the same extent as before the ■ assignment. Appellant, under the order of the court, was then in a position to establish his claim at law, if one existed, and to proceed against the property of the debtors as fully and to the same extent as though an assignment had not been made or an order of discontinuance entered.” We are of opinion that the Kelley case and the one at bar are identical in principle. Here, as in that case, there was no fraud; every creditor, except the ones whose claims were disputed, had an opportunity to get the same amount on their claims as did the consenting creditors; except that in the Kelley case the creditors were to be paid in full instead of fifty per cent, as in the case at bar. There was no concealment in this case. The assets of the estate were kept intact and ordered turned over to the insolvents by the order of discontinuance, and they were reinvested with the title and possession of all their property, not exhausted in the previous administration, to the same extent as before the assignment. That is all that the statute requires. Appellants were at full liberty to pursue the estate so turned over to the insolvents to the same extent as before the assignment. The fact that the assignors expected to pay the promised fifty per cent of their claims to the consenting creditors when they received back their property from the assignee, does not, in our opinion, invalidate the discontinuing order. Ho part of the insolvent estate was appropriated to the payment of the consenting creditors, nor were they given any lien upon it, and appellants were deprived of none of their legal rights. The order óf the County Court is therefore affirmed.