(Qornrll Vlaui ^rlfnal lOibrarg Cornell University Library KFN5365.B62 1895 A treatise on the common and statute law 3 1924 021 908 508 Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924021908508 A TREATISE COMMON AND STATUTE LAW OF THE STATE OF NEW YORK KELATIN& TO INSOLVENT DEBTORS, INCLDDING ARTICLE FIRST, SECOND AND THIRD OF TITLE 1, CHAPTER XVII OF THE CODE OF CIVIL PROCEDURE, AND XHB LAW OF YOLUITARY ASSIGNMENTS FOR THE BENEB^IT OF CEEDIT0E8, INCLUDme THB (S^itfral i^ssignment %,d of XB77, as ammir«b; TOGETHER WITH A CHAPTER ON COMPOSITIONS AND COMPOSITION DEEDS, AND AN APPENDIX OF FORMS. By JAMES L. ^ISHOP, AuTHOK OF " Code Practice in Civil Actions." THIRD EDITION. NEW YOEK: BAKER, VOORHIS AND COMPANY. 1895. Entered, according to Act of Congress, in the year eighteen hundred and ninety-five, by JAMES L. BISHOP, In the Office of the Librarian of Congress, at Washington. Burr Printing House, New York. PREFACE TO THE THIRD EDITION. Anothee edition of this book having been called for, the pre- vious editions have been carefully revised, and such additions have been made as the changes of the statutes and the progress of the decisions have rendered necessary. The amendment of the General Assignment Act, attempting to restrict the right of preference to one-third of the estate of tlie debtor, has provoked extensive litigation, which has resulted in the demonstration of the insuperable diificulty of preventing pref- erence by failing debtors in the absence of a I^ational Bankrupt Law. The zeal of creditors to secure priorities by attacking general assignments on the ground of fraud has added extensively to the reported cases relating to the procedure, as well as to the substan- tive law upon that subject. The chapters bearing upon this branch of the law will be f oimd to have increased in volume pro- portionally more than those devoted to other headings. In the preparation of the chapter relating to foreign and do- mestic assignments, the author is greatly indebted to the learning and industry of Mr. Robert P. Ilarlow. 'Sew York, February, 1895. PREFACE TO SECOND EDITION. In this edition the statutory proceedings for the discharge of an insolvent from his debts, and for his exemption from arrest, and for the discharge of an imprisoned judgment-debtor from imprisonment, as they now appear in the Code of Civil Pro- cedure, are given, together with notes and forms. The deci- sions of the courts of this State relating to general assignments, and to the construction and effect of the General Assignment Act, have been brought down as nearly to date as possible. The General Assignment Act as amended and the Rules of the Court of Common Pleas of the city of New York, relating to general assignments, are printed entire in the Addenda for convenience of reference, although the various sections of the statute and the rules are cited under their appropriate topics in the body of the work. The Forms have been revised, and the editor is indebted to Mr. William S. Kieley of the clerk's office of the Court of Com- mon Pleas, and Mr. Thomas H. York of the clerk's office of the County Court of Kings County, for valuable suggestions which add to their fullness and accuracy. The kind reception accorded by the profession to the previous edition of this work encourages the editor to hope that a similar indulgence will be extended to the present effort. New York, November, 1884. PREFACE TO FIRST EDITION. The purpose of this work is to present, in a convenient and harmonious form, the statutes and decisions of the State of New York, constituting what may be called the Insolvency System of the State. This plan includes a review of the various articles of the first title, of the sixth chapter, of the second part of the Revised Statutes, relating to insolvent debtors, among which are em- braced the important statute for the discharge of Insolvent Debtors from their debts, known as the " Two-thirds Act," and also the statutes for the exoneration of insolvents from arrest and their discharge from imprisonment on execution in civil actions, the latter of which is sometimes called the " Fourteen-day Act." The scope of the work also covers a consideration of the law of general assignments for the benefit of creditors. This subject has of late been regulated to some extent by " The General As- signment Act of 1877." The attempt is here made to present the law of assignments as expounded by our courts with a special view to that statute, and also to state and illustrate, as fully as the adjudged cases warrant, the practice under that act. The statute, however, has not materially altered the common law in reference to the validity and effect of such instruments, and the rules of law established by the courts in an extremely numerous class of cases have necessarily fallen under review. In conclusion, a brief chapter on the law of Compositions and Composition Deeds has been added. These various topics, although independent of each other, constitute together an important subdivision of the law of debtor and creditor, and through them must be worked out in the main, the problems which arise in cases of insolvency. Indeed, no other distinctive system of bankruptcy or insolvency has ever existed under the laws of this State. Vlll PREFACE. The repeal of the Federal Bankrapt Law, has again brought into full operation this system of law — if system it may be called — and it now remains to be seen how fnlly it will meet the re- quirements of the present conditions of business. Some changes are doubtless desirable and are to be expected, but while the law continues as it is, and even after any legislation which may reasonably be anticipated, the distinctive branches of the law here discussed must continue to form an important part of professional study. The author is conscious, as every one must be who undertakes the investigation of any extended branch of jurisprudence, of the wide difference between that which he has accomplished and that which remains to be done. He submits the results of his labor, with no pretension to having done more than to render somewhat less difficult of access the scattered declarations of the law con- tained in the statutes and reports. New York, November, 1878. CONTENTS. PAGE. Prefacesj ....... iii-viii Table of Cases Cited, ..... xv CHAPTER I. INTRODUCTORY. Insolvency and Insolvent Laws, ... 1 PART I. DISCHARGE OF AN INSOLVENT FROM HIS DEBTS. "THE TWO-THIRDS ACT." (Article First, Titles 1, Chap. XVII of Code of Civ. Pro.) CHAPTER II. Commencement of Proceedings ; Petition ; Schedule and Affidavits, ..... 15 CHAPTER III. The Order to Show Cause; Notice and Hearing, . 34 CHAPTER IV. Assignment, Discharge and Subsequent Proceedings, 46 CONTENTS. PART II. OF PROCEEDINGS BY AND AGAINST INSOLVENT DEBTORS, IMPRISONED OR LIABLE TO ARREST, IN CIVIL ACTIONS. CHAPTER V. PAGE. E.xEMPTiON FROM Arrest or Discharge from Impriso.nj- MENT OF AN INSOLVENT DEBTOR, ... 77 (Article Second, Title 1, Chap. XVII of Code of Civ. Pro.) CHAPTER VI. Discharge of Imprisoned Judgment Debtor from Im- prisonment ...... 85 (Article Third, Title 1, Chap. XVII of Code of Civ. Pro.) PART III. GENERAL ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. CHAPTER Vn. Defined and Distinguished ; The Assignment Laws, 109 CHAPTER Vni. Parties to Assignments, ..... 123 CHAPTER IX. Making, Acknowledging and Recording the Assignment, 150 CONTENTS. CHAPTER X. PAGE. The Assigned Property, ..... 170 CHAPTER XI. Preferences, ...... 192 CHAPTER Xn. Appropriation of Property in Assignments by Firms AND their Members, ..... 220 CHAPTER XHI. Fraud on the Face of the Assignment, . . 234 CHAPTER XIV. Fraud from Extrinsic Circumstances, . . 268 CHAPTER XV. Proceedings of Creditors to Avoid the Assignment, 312 CHAPTER XVI. Amendment, Reformation and Revocation of Assign- ment, ....... 300 CHAPTER XVII. Foreign and Domestic Assignments, , , 364 CONTENTS. PART lY. THE ADMINISTRATION OF THE ASSIGNED ESTATE. CHAPTER XVIII. I'AGE. Jurisdiction of the County Court and Common Pleas under the general assignment act of 1877, 391 CHAPTER XIX. The Inventory, Schedules and Bond, . . 397 CHAPTER XX. Powers and Duties of Assignees in General, . 416 CHAPTER XXI. Taking Possession and Custody of the Assigned Property, 435 CHAPTER XXII. Collecting in the Estate; Suits by Assignee, . 456 CHAPTER XXIII. Sale of the Assigned Property, . . . 477 CHAPTER XXIV. Liability of Assignees, ..... 488 CHAPTER XXV. Death, Removal, Resignation or Disability of Assignee, 504 CHAPTER XXVI. Claims Against the Assigned Estate; Notice to Cred- itors ; Proof of Debt, . . . . o'^ I PAGE. CONTENTS. CHAPTER XXVII. Accounting, ...... 539 CHAPTER XXVIII. Termination of the Trust ; Discharge of the Assignee, AND HIS Sureties ; Distribution, . . . 581 PART y. COMPOSITIONS. CHAPTER XXIX. Compositions and Composition Deeds, . THE GENERAL ASSIGNMENT ACT, . , 617 RULES OF THE COURT OF COMMON PLEAS, RE- LATING TO GENERAL ASSIGNMENTS, . 628 FORMS 637 INDEX, . 695 TABLE OF CASES CITED. Abbot V. American Hard Eubber Co., 136, 131. Abbott V. Bruere, 55. Abegg V. Bishop, 203, 304, 305, 379, 883 Abegg i). Schwab, 304, 308, 379, 380. Abraham v. Plestoro, 366, 368, 385. Achelis v. Kalman, 383. Acker v. Leland, 308, 535. Acker «. Phoenix, 590, 595. Acker v. Witherell, 419. Ackermann ». Emott, 483, 499. Acton V. Woodgate, 115, 363. Adams, Matter of, 53, 434, 498, 535. Adams v. Davidson, 393, 304, 305, 307, 437, 441, 480. Adams «. Houghton, 164. Adams d. Hyams, 413. Addison v. Burckmyer, 175, 185, 430. Adee ». Bigler, 337, 331. Adee v. Cornell, 138, 140. •Adlum «. Yard, 531. Adslt V. Butler, 339, 330, 381, 334. ^tna Nat. Bank v. 8hotwell, 568. Aikin v. Dunlap, 581. Aikin v. Wasson, 199. Ainslie v. Wilson, 58. Albany City Bank v. Schermerhorn, 346. Albany Fire Ins. Co. v. Bay, 477. Albert v. Bach, 347. Alcott v. Avery, 69. Alger V. Raymond, 56. Allen, Matter of, 575. Allen V. Borum, 590. Allen V. Brown, 463. Allen V. Danielson, 583. Allen «. Montgomery, 309. Allen v. Randolph, 435. Almon v. Hamilton, 600, 603. Am. Cutlery Co. v. Joseph, 301. Am. Ex. Bank «. Webb, 389, 396, 398, 316. Am. Flask & Cap Co. v. Son, 31, 86, 70, 74, 77. Am. Sugar Ref. Co. v. Fancher, 444. Ames V. Blunt, 349, 354, 356. Ames V. Downing, 484. Amory b. Francis, 533. ] Anderson, In re, 583. Anderson v. Hamilton, 4S6. Anderson D. Roberts, 356. Anderson «. Tompkins, 187. Anderson «. Van Alen, 389. Andrews ®. Brown, 144. Andrews v. Durant, 337, 331. Andrews v. Herriot, 370. Andriot, Matter of, 75. Andrus v. Waring, 53. Angrave v. Stone, 281. Anon. (1 Wend. 90), 35, 38. Anon. «. Gelpcke, 437, 432, 469. Anstey ■». Marden, 591. Anthony «. Stype, 377. Anthony v. Wood, 330, 833. Aplington, Matter of, 556. Appolos V. Brady, 113. Archer ». O'Brien, 193, 198. Armstrong v. Byrne, 343, 541. Arnot D. Bingham, 180. Arundel, Mx parte, 35. Ashby V. Blackwell, 583. Ashmore, Bx parte, 513. Askew V. La Cygne Exch. Bank, 369, 373. Astor ®. Lent, 190, 495. Atherton Co. «. Ives, 378, 383. Atkinson v. Denby, 613, 613. Atkinson v. Rochester Printing Co., 210. Att'y-Gen. ■». Moore, 15 Exrs., 437. Att'y-Gen. v. North Am. L. I. Co., 35:1 Atwood V. Protection Ins. Co., 382, 389. Auburn Ex. Bank ®. Fitch, 193. Augsbury v. Grossman. 24. Austin, Matter ofj 474. Austin V. Bell, 190, 243, 249, 325. Austin V. Munro, 492. Austin v. Rawdon, 474. Averill D. Loucks, 157, 158, 160, 316, 261, 371, 349. Avery's Case, 17, 33, 43. Avery v. Fisher, 133, 137. Ayres c. Scribuer, 19, 31. Babcock v. Dill, 314, 590, 595, 600, 008. XVI TABLE OF CASES CITED. Babcock v. Jones, 337. Babcouk. v. Read, 187. Bachman v. Lawson, 181. Bachrack ». Norloti, 148. Backer, Matter of, 565, 576. Bacon v. Harris, 280, 339, 331. Bacon v. Home, 372, 379, 383, 386. Baer v. Rooks, 109. Bagley ». Bowe, 337, 261, 203, 285, 339. Bagley «. Freeman, 189, 190. Bailey, Matter of, 515, 526. Bailey ®. Bergen, 463. Bailey v. Burton, 44. 48. Baker v. Judges of Ulster Com. Pleas, 68. Baker v Kenworthy, 488. Baker v. N. Y. Nat. Exch. Bank, 183. Baker v. Syilee, 7. Baker v. Taylor, 68, 70. Balch «. New York & O. M. R. R. Co., 199. Baldwin «. Bank of Newbury, 65. Baldwin v. Hale, 12, 61, 62, 63, 64, 65. Baldwin v. Peet, 190. Baldwin ». Short, 304. Baldwin v. Tynes, 138, 164. Ball V. Loomis, 391, 298, 306. Ball V. Slafter, 177, 449. Ballard v. Welister, 62. Baltimore & Ohio R. R. v. Glenn, 380, 382. Bamford v. Baron, 116. Bangs B. Strong, 70. Bank v. McLeod, 368. Bank of Orange Co. ®. Fink, 295. Bank of Silver Creek v. Talcott, 161, 236, 354. Bank of the Valley v. Gettinger, 373, 377 389 Banks »'. Wilkes, 501, 502. Banning v. Sibley, 111. Baptist Church, Petition of, 437, 438. Barbers. Rodgers, 11. Barber v. Winslow, 51. Barbour v. Everson, 399, 409, 513. Barck v. Senn, 9ij. Barger v. Durvin, 582. Barker v. Smith, 433. Barnes, Matter of, 431, 438, 498, 556. Barnes v. Gill, 50. Barnes v. Rettew, 309. Barnetts. Goble. 471. Barnett e. Kinney, 194, 378, 337. Barnewell v. Jones, 309. Barney v. GrifHn, 159, 172. 173, 239, 341, 347. 350, 257, 358, 501. Barnura v. Hempstead, 159, 215, 316, 317, 353, 361. Barr, Matter of, 537. Barstow v. Hansen, 68. Barth «. Backus, 182, 366, 383. Bartlet ». Prince, 4, 529. Bartlett i'. Hatch, 463, 503. Bassford, Matter of, 558. Batchelder, In re, 45. Bate D. Graham, 333. Bates, III. re, 533. Bates 1). McNulty, 332. Bates V. Paddock, 533. Bates «. Plonsky, 332. Bates 1). Uiiderhill, 502. Bates V. Williams, 94. Baumanu v. Jefferson, 174. Bayard v. Hoffman, 17(5. Bayly v. Schofield, 1. Bayne v. U. S., 5.U. Beach v. Ollendorf, 594, 607. Beamish v. Conant, 289, 441. Bean v. Amsinck, 609, 613. Bean v. Loryea, 63. Beans «. Bullitt, 111. Beard v. Beard, 499. Beaston v. Farmers' Bank, 135, 531. Beatty v. Soman, 300. Beaty v. Bcaty, 25. Beck V. Beverly, 32. Beck V. Burdett, 191, 328, 346. Beck D. Parker, 11. Becker v Koch, 306, 307. Becker v. Leonard, 220, 228. Becker v. Torrance, 348. Beckwith, Matter of, 577. Beckwith v Union Bank, 183, 389, 438, 464, 467. Bedell v. Chase, 302. Beers v. Houghton, 13, 66. Belden v. Smith, 308, 309, 310. Belknap, Matter of, 473. Bell V. Ellis, 3. Bell «. Fleming's Exrs., 533. Bell «. Holford, 360. Bellamy v. Bellamy's Admr., 155. Bellows V. Patridge, 346, 256, 260, 263. Belmont v. Lane, 319. Belmont v. O'Brien, 483. Benedict v. Huntington, 236, 255, 260. Bennet, Ex parte, .532. Bennett v. Burch, 103. Bennett v. Burton. 55. Benson, Matter of, 98. Benson v. Le Roy, 551, 553. Bentlpy « Whittemore, 377, 878, 385. Bergen v. Carman, 325. Berger v. Duff, 478, 487. Berger v. Varrelmann, 202, 204, 205, 3Q6, 308, 209, 280. Bernhelmer v. Rindskopf, 218, 335, 230. Berry «. Brett, 475. Berry v. Riley, 243, 350. Bertha Zinc & M. Co. v. Clute, 184, 574. TABLE OF CASES CITED. XVU Besley ®. Lawrence, 216, 533. Beste «. Berger, 143, 307. Belts «. Bagley, 19. Betz V. Conner, 393. Bholen «. Cleveland, 371. Bickham v. Lake, 298. Bicknell v. Speir. 130. Bier v. Kibbe, 113, 173. Biesenlbal, In re, 309, 310. Bigter v. Nat. Bank of Newburffh, 409. Bill e. Cureton, 116. Billing's Case, 31, 390. Billinge v. Pickert, 37. Billings V. Russell, 340, 270. Bircliell v. Strauss, 157. Bird V. Carltat, 367. Bird V. Pierpont, 367. Birdseve v. Underbill, 378, 381, 389. Birtwhistle «. Viirdill, 370. Bishop ■V. Halsey, 158, 173, 338, 330, 337. Bishop V. Houghton, 500. Bishop ». Stebbins, 192. Bissell «). Kip, 88. Black, Matter of, 485. Black V. McClelland, 54. Blackington ». Goldsmith, 148, 319. Blain ®. Pool, 288, 299, 378, 403. Blair v. Wait, 591 . Blake v. Williams, 365, 373. Blanchard v. Russell, 10, 63. Blaut V. Gabler, 177. Blauvelt v. Ackerman, 439. Blennerhassett ». Sherman, 280, 296. Bliss V. Cottle, 443. Bliss 0. Matteson, 606. Bliss V. Sliwarts, 590. Bloodgood V. Clark, 337. Bloodgood B. Sears, 493. Bloomer c. Waldron, 477. Bloomingdale •«. Seligman, 151. BIydenburgh v. Thayer, 420. Boak ». Blair, 151. Boardman v. Halliday, 196, 317, 360, 361. Bock V. Perkins, 156, 157. Bodluy V. Goodrich, 159. Boegler v. Eppley, 557. Boerum v. Schenck, 484. Boese v. King, 11, 308, 367. Boese v. Locke, 308. Boessneck v. Cobn, 113, 173, 202. Bogert V. Haight, 221, 236, 340. Bonati «.Welsch, 369. Bonner, Matter of. 393. Boone «. Citizens' Sav. Bk. , 505. Booss V. Marion, 233, 334. Booth v. Coldraan, 30. Boothbey v. Sowden, 591. Borden i). Sumner, 372. Borthwick ». Howe, 89, 93, 103, 103. Boslwick V. Beizer, 350, 352. 355. Bostwick V. Burnett, 309. Bostwick V. Menck, 298, 337, 333, 357. Bouchaud ». Dias, 530, 531. Boughton V. Flint, 553. Boulton ». Beard, 523. Boutwell «. Townsend, 199 Bowe V. Arnold, 320, 323. Bowe V. Wilkins, 321. Bowen v. Lease, 129. Bowery Hank Case, 135, 136. Bowery Nat. Bank, In re, 566. Bowery Sav. Bank v. Clinton, 55. Bowman ». Bainetaux, 149, 459, 503, 505, 508. Bowman v. Tallman, 493. Boyce, In re, 100. Boyd, Matter of, 104, 209. Boyd ». Belmont, 174. Boyd n. Dunlap. 349. Boyd V. Hmd, 591, 594. Boyd V. Vanderkemp, 69. Boydell «. Champneys, 32. Boyle V. Zacharie, 10, 13, 60, 61, 62. Boynton ». Rawson, 347, 348. Brackett v. Barney, 168. Bradley v. Angel, 465. Bradley v. Gregory, 593, 598, 599. Bradley v. Norton, 183. Bradstreet, Matter of, 19, 38, 40, 46. Brady, Matter of, 96, 97, 98, 99, 106. Brady v. Sheil, 598. Braem v. Merchants' Nat. Bank, 313. Brainerd «. Dunning, 236, 253, 254. Brandram v. Wharton, 582. Brashear v. West, 116, 157, 243. Breck v. Cole, 163, 606, 612. Brennan v. Willson, 149, 162, 408, 410, 432, 508, 513. Brent, Jn re, 45. Brent v. Bank of Washington, 530. Brevoort v. Warner. 548. Brick, Matter of, 578. Bridgeport Ins. Co. v. Wilson, 414. Briggs V. Davis, 113, 173, 363, 486. Brigham v. Henderson, 65. Brigham «. Tillinghast, 154, 194, 236, 255, 260, 363. Brinckerhoff v. Wemple, 433, 459. Brinkerhoff ». Brown, 338, 333, 344. Britten «. Hughes, 600. Brilton ». Lorenz, 1.52, 163, 164. Brod V. Heymann, 36. Broderick v. Smith, 525. Brodie v. Barry, 370. Brodie v. Stephens, 31, S3, 75. Broich, In re, 532. Brooks V. Gibbons, 542, 548. Brooks V. Hanford, 174. Brooks J). Marbury, 269. XVlll TABLE OF CASES CITED. Brooks V. Peck, 542. Brooks r>. Wilson, 344. Broom i). Broom, 143. Brouwer v. Harbeck, 1, 135. Brower v. Bauens, 540. Brown, In re, 98, 99, 100, 433, 528. Brown v. Bullon, .500. Brown v. Dakeyne, 594. Brown v. Guthrie, 113, 114, 317. Brown v. Halstcd, 298, 533. Brown v. Knox, 161. ' Browns. Lyon, 125. Brown v. May, 837. Brown v. Minturn, 115, 117, 134. Brown"!). Montgomery, 3. Brown ■». Kichols, 330. Brown ®. Pease, 189. Brown v. Rickets, 439, 499. Brown's Accounting, 493, 503. Browne v. Bradley, 33, 90, 91, 93. Browne D. Cavendish, 363. Brownell ». Curtis, 176. Browning i>. Hart, 148, 371, 381, 290, 441, 480. Brownson v. Gifford, 333. Bruce o. Lee, 612. Bruce v. Lorillard, 557. Briien v. Gillet, 499, 503. Bruen «. Hone, 545. Bruen v. Marquand, 594. Bryan v. Brisbin, 383. Bryce, Matter of, 194, 309, 453, 453. Buclian V. Sumner, 143. Buchanan v. Smith, 1. Buck r, Grirashaw, 444. Buel «. Gordon, 53, 55. Buhl V. Ball, 285. Bulger 1' Rosa, 233, 226, 333, 332. Bull, Matter of, 509. Bullis V. Montgomery, 394, 306, 436, 464. ■ Bullvraore v. Cooper, 33, 33, 51, 89, 91, 93.93, 103. Bunce v. Reed, 36. Bunch, Matter of, 556, 584. Bundschu v. Simon, 338. Bunn V. Vaughan, 459, 460. 505. Burbank, Matter of, 555. Burdick, flatter of, 536 Burdick v. Post, 171, 257, 479. Burghard v. Sondheim, 157. Burhans b. Kelly, 142, 232 Burkholder v. Stump, 310, 352. Burley v. Hiirtson, 198. Burlock V. Taylor, 386. Burnaby's Case, 25. Burnham v. Brennan, 307. Burrell v. Leslie, 347. Burrows » Alter, 522. Burtis V. Dodge, 499. Burlnett, Matter of, 453. Busby V. Finn, 522. Bush V. Lathrop, 431. Bush V. Roberts, 304. Buswell V. Lincks, 329. Butcher v. Butchei-, 601. Butler V. Boston & A. R. R. Co., 471. Butler V. Butler, 491. Butler V. Rhodes, 597. 599. Butler V. Stoddard, 191, 39?, 436, 441, 480. Butler V. Thompson, 12, 118. Butler v. Van Wyck, 190. Butler v. Wendell, 378, 383. Butt V. Peck, 159, 161, 258, 407. Byliindt v. Comstock, 87, 101. Byrd v. Badger, 63. Byrd v. Hall, 283. Caamans, Matter of, 100. Cabot Bank o. Bodnian, 583. Camp V. Buxton, 165. Campbell v. Erie Ry. Co., 320. Campbell v. Perkins, 53. Campbell v. Wood worth. 159, 341 559. Carman r. Kelly, 441, 482. Carpenter, Matter of, 458. Carpenter v. Muren, 192. Carpenter v. Roe, 335. Carpenter v. Underwood, 191, 248, 258. Carpenter d. White, 7, 51. Carr v. Johnson, 298. Carr v. Van Hoesen, 819, 320. Carrick, Matter of, 555. Carroll «. Shields, 606, 612, 613. Carter v. Goodrich, 68. Carter v. Hammett, 189. Carter v. Warne, 189, 439. Carver v. Barker, 304, 303. Case V. Abeel, 438, 490. Case V. Belknap, 71. Case V. Phelps, 296. Casey v. Jones, 194, 264, 266, 396, 441, Caskaden, Mx parte, 87, 90. Caskie v. Webster, 371, 380, 388. Casserly ». Manners, 310. Castell, Ex parte, 230. Castle V. Lewis, 319, 320. Gates B. Allen, 327, 339. Catlin V. Catlin, 560. Catlin V. Foster, 310. Catlin ®. Wilcox S. P. Co. , 365. Cavanagh ii. Morrow, 313, 314, 315. Cavin v. Gleason, 178, 180. Cecil V. Piaistow, 611. Central Nat. Bank v. Seligman, 303, 203, 204, 207, 379, 383. Chadwick «. Burrows, 243. Chafee v. Fourth Nat. Bank, 384, 386. Chaffee v. Fort, 442. TABLE OF CASES CITED. XIX ChamTjorlain v. Greenleaf , 512. Cliamberlin v. Perkins, 10. Cliambers v. Lewis, 442. Cliambeis o. Mincliin, 493- Cliambers v. Smith. 199, 225. 226, 230, 237, 285, 286, 298, 339, 340. Chance v. Isaacs, 464, 465. Chandler v. Powers, 283, 298, 334, 335. Chapia ®. Thompson, 161, 301, 528. Chapin v. Weed, 483. Chappell, Matter of, 91. Chautauqua Co. Bank v. Risley, 324, 325, 342. Chautauqua Co. Bank v. White, 328, 342. Cheever «. Brown, 230, 527, 574. Chemical Nat. Bank v. Kohner, 592. Childs ». Kendall, 445, 446. Chittenden v. Davidson, 325, 326. Chouteau v. Suydam, 492. Christie s. Herrick, 458. Christy ®. Libby, 539, 540, 544. Chubbuck v. Vernam, 545. Churchill v. Wells, 2. Citizens' Bank v. Williams, 222,225. Claflin V. Gordon, 345, 346, 348. Claflin V. Hirsch, 230, 231, 285, 298. Claflin V. Smith, 165, 336. Clap V. Smith, 157. Clapp V. Clark, 207, 280. Clapp «. TJtley, 256. Clark V. Andrews, 199, 213, 277, 278. Clark V. Brockway, 330, 348. Clark t. Clark, 502. Clark V. Conn. Peat Co., 388. Clark V. Craig, 500. Clarke. Dickinson, 425. Clark s. Fuller, 259. Clark c. Hume, 496. Clark V. Marx, 311. 352. Clark V. Mauran, 421. Clark B. Rowling, 56, 69. Clark v. Taylor, 278. Clark's Exrs. v. Van Ricmsdyk, 63. Clarkson c. De Peyster, 330. Clay ». Ray, 606, 612. Clay V. Smith, 65. Cleflin, Matter of. 577. Clews v. Kehr, 304. Clews V. Reilly, 604. Clift v. Moaes, 358, 587. Clinton v. Hart, 31, 53. Cloughu. Bond, 490. Clougto. Dixon, 490. Clute V. Newkirk, 280, 295. Coates V. First Nat. Bank, 182, 308, 438. Coats V. Donnell, 132, 136. Cockshott V. Bennett, 606, 607, 612. Coddington v. Davis, 153. Codwise v. Gelston, 429. Coe ®. Beckwith, 437, 428. Coffin, Matter of, 491, 558, 575. Coflin V. Gourlay, 96. Coffin v. Kelling, 365, 377. Coffin V. McLean, 175. Coffin V. Reynolds, 199. Cohen, Matter of, 30. Cohen v. Cunningham, 35. Cohen v. Irion, 237, 285, 398. Cohen v. Moorhouse, 215. Cohen's Case, 41. Cohn, In re. 310, 493, 510. Colburn v. Morton, 351, 354, 433, 483. 485, 491. Colden v. Eldred, 395. Cole 11. Cunningham, 365, 388. Cole ». Millerton Iron Co., 131. Cole B. Tyler, 335 Coleman v. Burr, 339, 301, 339. Coles V. Coles, 143. Collier v. Munn, 556. Collins, In re, 422. Collins V. Evans, 71. Collomb V. Caldwell, 221, 228, 347, 250, 340. Collumb V. Head, 221, 228, 349. Columbian Bank's Estate, 179. Colwell «. Lawrence, 463. Coman v. Storm, 87. Comegys v. Vasse, 181. Compton B. Mellis, 131. Comstock's Case, 87. Conard ■B. Atlantic Ins. Co., 539, 530. Cone V. Whitaker, 57. Conger c. Ring, 483. Connah v. Sedgwick, 148, 149, 391, 337, 436, 481, 513. Connor, Matter of, 430. Conrow s. Little, 313. Consolidated T. L. Co. ■». Collier, 384, 385, 389. Constantien v Blache, 607. Continental Nat. Bank c Koehler, 594. Converse v. Bradley, 65. Converseville Co. v. Chambersburg Woolen Co., 183, 184, 185, 395, 540. Cook, Matter of, 28, 524. Conway, In re, 125. Cook b! Kelley, 164, 165. Cook V. Kelly, 406. Cook v. Lewry, 498. Cook 7>. Moffat. 12, 60, 62. Cook V. Van Horn, 372, 377. Cooling V. Noyes, 600. Coon V. Stoker, 613. Coopeu. Bowles, 138,140,327, 350, 352. Cooper ». Whitney, 113, 159. Copeland v. Stephens, 189. Cork V. Saunders, 599. XX TABLE OF CASES CITED. Cornell, Matter of. 431, 447, 458, 488, 493. Cornell v. Dakin, 67, 68. Corning v. White, 41, 101, 344, 347, 348, 420, 431. Couch ». Delaplaine, 189. Coursey v. Morton, 385, 286, 287. Courtney v. Ruraley, 854. Coutant V. Servoss, 477. Cowing, Matter of, 563, 568. CoynetJ. Weaver, 236, 263, 305, 307, 469. Cox V. Platl, 222, 396. Cox V. Sohermerhorn, 558. Crabb v. Young, 488. Craig V. Craig, 508. Cram,/n re, 532. Cram v. Mitchell, 146, 148, 149, 194, 391, 435. Cramer v. , 70. Crandell v. Cochran, 612. Crane o. Roosa, 143. 333. C'ranley v. Hillary, 605. Crans «. Hunter, 613. Crapo V. Kelly, 390. Crawford v. Neal, 296. Crippeu B. Hudson, 338, 330. Crisfleld i). Bogardus, 448. Crofts Williams, 503. Cromien, Matter of, 395, 540. Cronan v. Cotting, 54. Crook V. Rindskopf, 225. 228, 329, 237 317 Cropsey v. McKinney, 123, 134, 337. Crosbie v. Leary, 462, 464 Crosby v. Hillyer, 116, 163. Cross V. Hobson, 68, Croton Ins. Co., Matter of, 438, 469. Crouch V. Gridley, 53, 54. Croughwell, In re, 310, 400. Crouse v. Frothiugham, 177, 383, 445, 447. Crouse v. Hessler, 385. Crow V. Colton, 181. Crow V. Ruby, 155. Crowder, Matter of, 453. Cruger v. Halliday, 149, 433, 508. Cumber «. Wane," 590, 591. Cumisky v. Lewis, 443. Cundall, Ex parte, 25. Cunningham D. Butler, 386, 388. Cunningham v. Freeborn, 115, 124, 155, 196, 315, 338, 251, 254, 356, 3.58. Cunningham v. McGregor, 470. Cunningham J). Kortou, 3. Currie«. Hart, 148, 149, 191, 353, 291, 437 Currier, Matter of, 526. Curtis v. Hutton, 370. Curtis V. Leavitt, 3, 133, 136, 341, 247. 428. Curtis V. Smith, 460, 505, 516. Cuthbert v Chauvet, 354. Cutter i>. Hume, 303, 379, 835, 403, 451. Cutler v. Reilly, 470. Cuyler «. McCartney, 268, 269, 273, 296, 304, 305, 806, 307, 464. Cuyler v. Sanford, 132. Dalon V. Kapp, 86. Dalpay, In re, 889. Dambman ». Buttei-fleld, 297, 298. Dana «. Owen, 194. Dare, Matter of. 544, 566. Darling*. Brewster. 561. Darling v. Rogers, 158, 188, 336, 241, 267. Darrow, Matter of, 544, 566. Darrow v. BrufE, 146, 165. Davenport, In re, 556. Davenport v. Kelly, 346, 348. Davidson r. Alfaro, 465. Da vies ». Edwards, 582. Da vies v. Fish, 334. Davis, Matter of, 220, 566, 568. Davis V. Grove, 141. Davis ®. Harrinston, 271, 379, 382, 285. Davis «. Howard, 277, 280, 301. Davis V. Howell, 222. Davis r. Leopold, 349, 351. Davis «. Perrine, 357. Davis V. Stover, 493. Davoue v. Fanning, 433, 483, 484. Dawson, Matter of, 333, 523. Day V. Bach, 331, 471. Day V. Bardwell, 10. Dean, In re, 431, 441, 481, 488, 556, 557. De Camp v. Marshall, 158, 161, 334, 388, 398, 403. De Caters v. Do Chaumont, 483, 485. Dederick v. Leman, 590. De Kay ». Irving, 341. Delmonico v. Guillaume, 143. Del Valle «. Hyland, 198, 830. Demaresl v. Darg, 76. Deming ». Colt, 138. Dennistoun v. Hubbell, 189, 49.5. Denny, Matter of, 474. Denny zi. Bennett, 61, 63, 367. Denton v. Morrill, 178, 226, 330, 289, 403. Denzer v. Mundy, 167, 335, 818. De Peyster v. Clendlning, 168. De Peyster v. Ferrers, 433, 433. Depuy V. Swart, 59. Derby v. Tale, 545. De Buyter «. Trustees of St. Peter's Church, 125, 126. Desobry ■». Morange, 68 TABLE OF CASES CITED. XXI Deutscli V. Reilly, 319. Develin «. Cooper, 18, 51, 73, 78, 79, 108. Devlin «. Cooper, 31. Dewey v. Adams, 291, 395. Dewey v. Moyer, 446, 447. Dexter v. Adler, 351. 853. Day s. Dunham, 423. Dey V. Poughkeepsie Mut. Ins. Co., 437. Deyo c. Van Valkenburgh, 53, 56, 70. Dias V. Bouchaud, 530. Dias V. Brunell's Ex'r, 504. Dickinson, Ex parte, 381. 383. Dickinson v. Benham, 277, 390. Dickinson v. Burrell, 178. Dickinson v. Codwise, 483. Dickson v. Mayer, 212. Dickson ®. Rawson, 112. Dieckerhoff «. Ahlborn, 35, 36, 83, 101. Diefendorf o. Spraker, 149, 508. Dimmockj). Bixby, '428. Dimon v. Delmonico, 188, 316. Dimon«. Hazard, 142, 231. Disosway v. Bank of Washington, 572 D'lvernois v. Leavitt. 255, 257, 370. Dobson v. Racey, 483. Dodge V. Sheldon, 309. Dolson e. Kerr, 190, 272, 395, 808, 809. Donnelly v. Corbett, 11, 13, 60, 61, 62, 65. Donoghue, Matter of, 99. Donohue ■b. Woodbury, 590. Donovan v. Cornell, 184. Doremus v. Lewis, 173, 173. Dorney v. Thacher. 851, 352, 552. Dorthy -d. Servis, 448. Doughty D. Savage, 596. Douglas V. Smith, 543. Dovey's Appeal, 345. Dow V. Plainer, 190, 248, 263. Down D. Hatcher, 590. Downes «. Grazebrook, 477. Downing v. Marshall, 858. Dresser «. Brooks, 56, 68. Dre.sser v. Shufeldt, 69, 70, 74. Driscoll D. Fiske, 156. Dryer, Matter of, 565, 567, 574, 584. Dudley v. Danforth, 270. Duff «. Hutchinson, 338. Duffy B. Duncan, 159, 438. 468,481, 489, 490, 499, 554, 556, 5.58. Duncan, Matter of, 323, 538. Duncan v. Duboys, 31. Duncan v. Lyon, 539. Dunham v. Waterman, 116, 154, 338, 480. Dunham v. Whitehead, 113, 114, 173, 251. Dunkerson, In re, 533. Dan]a.pv. Rogers, 366, 389. Dunscomb v. Dunscomh, 439, 498, 499. Dupuy V. Leavenworth, 144. Durant c. Pierson, 142, 222, 226, 280, 334, 856, 358. Durfee v. Bump, 232. Durgin v. Ireland, 595. Durr D. Beck, 270. Dusart v. Delacroix, 90. Dusenbury v. Hoyt, 71. Dutcher «. Importers' & T. Nat. Bank, 3. 133, 310. Dutchess Co. Mut. Ins. Co. ». Wagon- en, 151. Dyett V. Hyman, 336. Eames, Ex parte. 10. Earle ®. Earle, 503. Eastabrook v. Scott, 606. Eastern Nat. Bank v. Hulshizer, 388, 390, 404. Easton Nat, Bank ti. Buffalo Chem. Works, 330. Eastwood o. Ward, 230. Eaton, Matter of, 309. Edgell «. Hart, 449. Edgerly e. Bush, 373. Edmestou c. Lyde, 334, 844, 358. Edwards, In re. 497, 515, 555. Edwards B. Kearzey, 61. Edwards v. Mitchell, 381. Edwards v. Woodruff, 334. Egbert ®. Baker, 383, 389. Egberts v. Wood, 137, 142, 161, 222, 333 543 Eichber'g v. Wickham, 338. Einstein e. Chapman, 292. Eldridge b. Strenz, 606. 612. Blias n. Farley, 250, 253. Ellis V. Myers. 288, 403. Ellisons. MofCatt, 544. Elsey ». Cox. 354. Elsworth V. Caldwell, 25, 56. Ely V. Cook, 235, 250, 276. Ely v. Cooke, 33. Emberson's Case, 19, 22. Emerson v. Bleakley, 459, .505. Emerson ii. Knower, 155. Emerson s. Patridge, 389. Emerson v. Senter, 138, 142, 269. Emery ». Clark, 55. Emigrant Ind. Sav. Bank v. Roche, 1.56, 186. Empire B. & M. L. Assoc, v. Stevens, 561. Empire City Bank, Matter of, 133. Empire Pav. & C. Co. «. Robinson, 337. England ii. Reynolds, 161. xxu TABLE O^ CASES CITED. Englar 11. OfEutt, 179. Erickson p. Quinn, 343. Ericsson v. Brown, 199. Erwin d. Saunders, 71. Erwin e. U. S., 187. Estes «. Gunter, 279, 283. Estes«. Wilcox, 327, 331. Evans v. Chapin, 399, 409. Evans v. Warner, 377. Everit, In re, 452. Evertson ». Givan, 560. Every 0. Edgerton, 295. Eyre v. Beebe, 159, 229, 264, 273, 274. 290, 559. Fairchild, Matter of, 537. 574. Fairchild i>. Gwynne, 102, 163, 899. Fall River Iron Works Co. «. Croade, 372, 380. Fanshawe ■». Lane, 145, 230. Farmers' Bank v. Blair, 590. Farnam, Matter of, 544. Farnum, Matter of, 541, 565. 566, 574. Farquharson v. Eichelberger, 243. Farquharson r. McDonald, 190. Farrar v. Hutchinson, 590. Farrington v. Hodgdon, 603. Farwell i>. Furniss, 277. Farvrcll v. Nilsson, 201. Faulkner v. Hymau, 373. Fawcett v. Gee, 593. Faxon s. Ball, 336. Faxon v. Mason. 285, 357. Fay, Matter of. 197, 209, 236, 537. Fay i\ Grant, 3S7. Fazarkerley ». McKnight, 603. Feigelstock, Matter of, 527. Felch r. Bugbee, 365. Fellows T. Fellows, 333. Fellows V. Greenleaf, 124. Fellows V. Stevens, 590, 591, 593, 599 Felt, Matter of, 357, 556. Felt P. Dorr. 470. Fera «. Wickhani, 465, 466. Ferchen t. Arndt, 179. Ferrin -d. Myrick. 492. Ferriss v. Am. Ins. Co., 471. Ferry ». Bank of Cent. N. Y., 1. Fiedler v. Day, 239, 340, 391, 398. Field, Matter of, 583. Finch, Matter of, 93, 97. Finck, Matter of, 96, 528. Findlay v. Hosmer, 533. First Kat. Bank r. Bard, 202, 304. 208. First Nat. Bank v. Cent. Nat. Bank, 351 1. First Nat. Bank r. Eastern' R. R. Co., 533. First Nat. Bank v. Halsted, 332, 298. First Nat. Bank c. MofEatt, 305, 307. First Nat. Bank v. North Wis. Lum- ber Co., 301. First Nat. Bank v. Raymond, 298. First Nut. Bank i: Walker, 373, 877, 389. First Nat. Bank v. Walton, 1, 3. First Nat. Bank v. Warner, 271, 279. First Nat. Bank v. Wood, 281. Fish V. Rowland, 333, 462. Fisher ®. Murry, 137, 138. Fitch ». Smith, 347, 348. Fitch v. Sutton, 590. Fitzgerald, Matter of, 101. Fitzgerald -u. Alexander, 72. Fitzgerald n. Topping, 486. Flagg T. Ely, 438. Flagler i\ Schoeffel, 154, 306. Flagler 11. Wheeler, 304, 305. Flannery e. Van Tassel, 304, 306. Fleitmann «. Sickle, 284. Flint v. Bell, 486, 544. Flynn v. Ledger, 183, 430. Foote V. Beecher, 304. Forbes r. Scannell, 371. Forbes i\ Waller, 338, 302. Ford r. Andrews, 56, 58. Forman ». Drew, 30. Forshaw p. Higginson, 515. Foisyth n. Clark, 530. Fort ». McCully, 466, 468. Fort Stanwix Bank v. Leggett, 177, 316, 446, 447. Foster, In re, 437. Foster v. Oldham, 189, 496. Foster's Appeal, 143. Fourth Nat. Bank v. Burger, 269. Fowler, In re, 97, 100. Fox V. Adams, 372, 880. Pox t. Heath, 133, 316, Fox t. Moyer, 328, 330. Fox t). Woodruff, 56. Francklyn «. Sprague, 185. Franey ». Smith. l'o7, 163. Frank v. Bingham, 180. Frank 1). Bobbitt, 8S1. Franklin « Becsley, 80. Franklin c. Osgood, 432, 477, 489. Frary r. Dakin, 19, 69. Fraschieris v. Henriques, 423. Fraser 11. Murdoch, 354. Fraser d. Phelps, 548. Frazier n. Fredericks, 380. Frazier v. Truax, 153, 158, IGO, 317, 300. Freeman, Ex parte, 314. Freeman t. Campbell, 300. Freeman v. Cook, 428. Freeman v. Deming, 309. Frelingnuysen ». Nugent, 179. Friedburgher v. Jaberg, 282, 287. Friedman, Matter of, 515. TABLE OF CASES CITED. xxm Friedman v. Bierman, 398, 300. Friend v. Micliaelis, 322, 319. Frost V. Carter, R3, 54, 56, 58. Frost V. Mott, 319, 328. Frothlngham v. Hodenpyl, 327, 331 Frverr. Rockefeller, 169. Fuller V. Brown, 335. Fuller V. Steiglitz, 380, 383, 389. Fullerton s. Nat. B. &T. Ins. Co. 534. Fulton, Matter of, 558. Fulton V. Whitney, 483, 484. Gallatian v. Cuunlngliara, 483, 484. Galwey v. U. S. Steam Sugar Refinery Co., 145. Gansevoort v. Nelson, 525. Garcie v. Sheldon, 40. Gardners. Gardner, 551, 553. Gardner v. Lay, 53, 57, 70. Gardner v. McEwen, 449. Gardner v. Ogden, 483, 484. Garloelc v. Vandevort, 540. Garner ». Wright, 543. Garner v. Frederick, 190. Garrard v. Lauderdale, 115, 363. ■ Gasherie «. Apple, 377. Gasper «. Bennett, 335. Gates V. Andrews, 138, 257, 861. Gaul V. Clark, 96. Geere v. Mare, 606. Geery v. Bucknor, 71. Geery ®. Geery, 337. Geery's Appeal, 11. Geisse v. Beall, 533. Genesee Co. Bank v. Bank of Batavia, 334. Genet v. Binsse, 535. German Ins. Bank n. Nunes, 375 Gerry, Matter of, 493. Getty ®. Spaulding, 461. Ghost V. Waller, 490. Gibbs V. Glamis, 3fi3 Gibn^y v. Marchay. 305. Gibson ». Winter, 594. GifCord, Ej: parte, 604. Gilbert, Matter of, 524. Gillet «. Fairchild, 419. Gillet V. Moody, 132. Gillies D. Crawford, 27. Gillott ®. Redlich, 277. Gilraan ». Lockwood, 13, 61, 63, 65. Gilmour v. Thompson, 613. Gindre «. Kean, 183, 184. Ginsberg, Matter of, 541. Ginther ». Richmond, 110, 158, 368. Glendinning, Ex parte, 604. Glenny v. Langdon, 446. Glenville Woolen Co. v. Ripley, 461. Globe Ins. Co., In re, 475. Globe Ins. Co. v. Cleveland Ins. Co., 309. Globe Woolen Co. v. Carhart, 285. Goldenbergh b. Hoffman, 590. Goldenburg v. Hoffman, 594. Goldsmith, Tn re, 4.')3. Goldsmith v. Russell, 354. Gomez v. Garr, 472. Gonceliei' v. Foret. 541. Good V. Cheesman, 591, 594. Goodeil V. Buck, 179. Goodhue v. Clark. 427. Goodman, K.r. parte, 532. Goodman v. Niblack, 187. Goodrich v. Clute, 225. Goodrich «. Downs, 171, 173, 190, 316, 238, 247, 249, 350. Goodwin v. Goldsmith, 442. Goodwin v. Griffis, 91. 103. Goodwin «. Noble, 440. Goodwin v. Wertheimer, 442, 443. Gordon, Matter of, 113, 160, 17u. 172, 349, 352, 3",3. Govham v. Innis, 336, 232, 299. GouUling V Davidson, 614. Gony, Matter of, 538. Grady v. Bo we, 134. 320. GraefE's Appeal, 533. Graham v. O'Hern, 71. Graham v. Van Diemen's Land Co., 440. Granger v. Lyman, 212. Grant v. Chapman, 194, 315, 258. Graser «. Stellwagen, 137. Graves v. Woodbury, 468. Greef ». Sickle, 284. Gieen ». McArthur, 606. Green v. Morse. 301, 531, 533, 528. Green v. Slayter, 346. Green «. Trieber, 243. Green v. Van Buskirk, 373, 374, 375. Green v. Winter, 439, 483, 484, 556. Green v. Wvnn, 604. Greene d. Mowry, 371, 377. Greenleaf v. Mumford, 330. Greenwood v. Lidbetter, 591. Greenwood «. Wakeford, 515. Gregg V. Sloan, 373, 377, 389. Gregory «. Campbell, 581. Grey, Ex parte, 518. Griffin i. Marquardt, 388, 354, 256, 369, 274. Griffin v. Rogers, 111. Griffith V. Griffith, 347. Griffith v. Ricketts, 363. Grinnell v. Biichanan, 441. Griswold v. BuiTOUghs, 443. ' Griswold v. Pratt, 10. Griswold .». Sheldon, 291. Grocers' Nat. Bank v. Clark, 40, 82, 83, 87. Groencke. Matter of, 524, 565, 574. Groshon v. Lyon, 540. XXIV TABLE OF CASES CITED. Grosvenor, Ex parte, 314. Grove, Matter of, 460, 506, 516, 543. Graver ». Clinton, 54. Grover c. Wakeman, 112, 116, 125, 158, 173, 190, 194, 196, 216, 223, 223, 236, 237, 238, 239, 349, 361, 263, 301, 3.57. Guardian Savings Inst., Matter of, 560. Guilford v. Mills, 445. GuillanderB. Howell, 373, 374, 388. Gutzwiller «. Lackman, 523. Haas V. O'Brien, 308. Habicht v. Pemberton, 333. Hackley «. Draper, 419. Hadley Falls Nat. Bank ». May, 604. Hagaman, Ex parte, 88. Haggarty v, Pittman, 149, 337, 513. Haggertv «. Diiane, 443. Haggerty «. Granger, 137, 138, 141, 227. Haggerty v. Palmer, 420, 423, 444. Haggerty v. Simpson, 604. liaiglit. Matter of, 98. Hailey v. Ano, 341. Haines v. HoUister, 543. Hale V. Stewart, 193. Hale ® Sweet, 16, 24, 28, 33, 51, 70. Hall !). Arnold, 193, 193. Hall i\ Boardman, 386, 389. Hall ■». Fowler, 55. Hall V. Gordon, 68. Plall «. Kellogg, 92, 101, 319, 311. Hall «. Merrill, 593, 594, 606. Hall v. Bobbins, 31. 73. Hall «. Stryker, 319. Hall v. Tuttle, 393. Hallgarten v. Oldham, 374. Halliday v. Noble, 454. Halsey v. Reed, 533. Halsey «. Whitney, 116, 125, 155, 161, 594. Halstead v. Gordon. 159, 357, 483. Halstead v. Ives, 076. Halsted d. Straus, 377, 378. Hamblen «. Ratigan, 603. Hamilton Nat. Bank v. Halsted, 349. Hammond v. Hudson River I. & M. Co., 333. Hancora n. Allen, 490. Hanford n. Paine, 373, 377, 378, 383, 384, 387. Hanover Nat. Bank v. Blake, 607, 610, 611. Hanson v. Stevenson, 496. Hard v. Milligan, 142, 233, 445. Hardmann v. Bowen, 163, 164, 271, 296, 399, 409, 513. Hardt v. Heidweyer, 301. Hardt v. Levy, 145, 332. Hardt v Schwab, 379, 380. Hardy t. Ames, 535. Hardy v. Metropolitan Land & F. Co., 490. Harloe ■o. Foster, 603. Harmony F. & M. Ins. Co., Matter of, 474. Harrhy v. Wall. 601. Harrington v. Erie Co. Sav. Bk., 486. Harrington v. Keteltas, 493. Harris v. Hart, 421. Harris v. Pratt, 431, 432. Harris v. Thompson, 138, 129. Harris' Estate, In re, 553. Harrison v. Close, 590. Harrison v. Harrison, 370. Harrison v. Lourie, 54, 83. Harrison «. Mock, 147, 491. Harrison v. Sterry, 365, 370. Hart V. Albright, 329, 331. Hart v. Crane, 257, 479, 480, 483. Hart V. Dubois, 89, 94. Hart V. Gedney, 480. Hart -0. Ten Eyck, 477. '' Hartell v. Morgan, 599. Hartwell e. Colvin, 548. Harvey «. Hunt, 612. Harvey v. McDonnell, 333, 445, 447. Harvey's Adm'r «. Steptoe's Adm'r, 478. Harvier v. Guion, 597. Hasbrouck d. Hasbrouck, 479, 549. Hasbrouck t\ Stokes, 190. Hastings v. Belknap, 245, 327, 331. Hastings v. Thurston, 334. Hastings v. Wilson, 495, 496. Haswell «. Lincks, 330. Hatch V. Brewster, 45. Hatch ®. Smith, 155. Hausclt V. Vilmar, 194, 273, 276, 378. Havemeyer v. Loeb, 311, 352, 355. Havens ». Hussey, 138, 146. Hawkins' Appeal, 11. Hawley v. Beverley, 603. Hawley ■». Cramer, 483, 484. Hawley v. Mancius, 14'7, 431. Hawley v. Ross, 505. Haxtun v. Bi.shop, 135, 127. Hayden v. Bucklin, 346, 347. Hayden t). Palmer. 45, 83, 87. Haydock v. Coope, 216, 318, 345, 379, 283, 316. Hayes v. Bowe, 104. Hayes ti. Heyer, 146. Haynes v. Brooks, 142, 225, 336, 337, 328, 317. Hays V. Doane, 483. Hayward v. Kinsey, 458. Heald v. MacGowan, 139. Heard v. Sturgis, 181. Heath, Matter of, 199. TABLE OF CASES CITED. XXV Heather v. Keil, 470. HeckmaQ v. Messingei", 190. Hefter «. Cahn, 600, 607. Hegeman v. Hegeman, 183. Hellman v. LicUer, 71. Helmbold v. Helmbold Mfg. Co., 183 Henderson v. Sturgis, 424. Henderson's Appeal, 111. Hendricks v. Judah, 54. Hendricks v. Robinson, 114, 194, 215, 254, 833. Hendricks ■». Walden, 215, 254. Henlein, Matter of, 510. Hennocksburgh, In re, 53. Henriques «. Hone. 312, 357. Hepburn v. Hepburn. 458, 493. Herman, Matter of, 576. Heroy v. Kerr, 128. Herrick -c. Borst, 1, 2. Herron, Matter of, 483. Hertell v. Van Buren, 544. Hervey v. Rhode Island Loco. Works, 376. Hess, Matter of, 359, 578. Hess V. Blakeslee, 154, C78. Hess «. Hess, 319, 320, 321. Hevenor, Matter of, 161. Heye ®. BoUes, 142, 233, 328. Heyer v. Alexander, 869, 384. Hey wood ii. Kingman, 541, 552. Hibernian Nat. Bank ®. Lacombe, 865, 368, 877, 883. Hicks ®. Hotchkiss, 8, 61, 62. Hicks V. McGrorty, 464, 465. Higgins «. Crichton, 335. Higgins «. Curtis, 270. HigginsB. Mayer, 612. Higgins «. Pitt. 606. Higgins V. Whitson, 431, 489. Hih V. Agnew, 160. 265. Hill V. Knickerbocker E. L. & C. Co., 218 Hill r. Northrop, 192. Hill V. Reed, 125, 134, 136. Hill V. Spencer, 200. Hill V. Woodberry, 279. Hillyer «. Rosenberg, 98. HinchlifEe «. Shea, 349. Hinck v. Dessar, 324. Hine «. Bowe, 112. Hines v. Ballard, 69. Hitchcok V. Cadmus, 252, 487. Hitchcock •». St. John, 138, 291, 292, 394, 295, 357, 441. Hoag V. Hbag, 417. Hoagland v. Trask, 459. Hocken ■». Browne, 55. Hodgman v. Western R. R. Co., 174. Hoffman ». Mackall, 113. Holbird «. Anderson, 193, 276. Holbrook, Matter of, 452. Holbrook v. N. J. Zinc Co., 344, 345. Holbrook «. Receivers of Am. Fire Ins. Co., 475. Holbrook «. Vose, 422. Holford V. Pbipps, 354. Hollins V. Brierfield C. & I. Co., 823, 329. Hollister v. Burritt, 498. Holmer v. Viner, 600. Holmes v. Davenport, 178. Holmes v. Gilman, 178. Holmes v. Hubbard, 156. Holmes «. Lansing, 87. Holmes «. Remsen, 865, 866. 368, 389. Holridge v. Gillespie, 484, 491. Holt ■». Holt, 483. Holyoke v. Adams, 67. Hone e. De Peyster, 471. Hone V. Ilenriquez, 313, 318, 850, 3.J7. Hone V. Woolsey, 361. Hood's Estate, 438, 490. Hooley v. Gieve, 180. Hooper ®. Baillie, 139, 165, 320. Hooper v. Beecher, 140, 166, 427, 480. Hooper v. Tuckerman, 113, 368. Hope Mutual Ins. Co. v. Perkins, 3. Hopkins v. Banks, 181. Hopkins®. McLaren, 346. Horsfall, Matter of, 514, 565, 567, 574, 577, 583 Horstman v. Miller, 593. Horton v. Riley, 613. Hosford V. Nichols, 181. Hotop «. Durant, 296. Hotop ». Neidig, 157, 160. Houghton V. Westervelt, 257. How V. Keniictt, 495. Howard v. Bartolozzi, 33, 600. Howard «. Priest, 148. Howard i). Rhodes, 515. Howard v. Waters, 516. Howard Nat. Bank ». King, 878, 388. Howden «. Haigh, 608, 013. Howe, In re, 430, 431. Howe «. Earl of Dartmouth, 490. Howes, In re, 99. Hoyt 1). Bounett, 535. Hoyt « Godfrey, 239, 385. Hoyt B. Thompson, 365, 868. HoytB. Thompson's Ex'r, 865, 371. Hubbell V. Carpenter, 604. Hubbell v. Merch. Nat. Bank, 334. , Huffman ». Hulbert, 2. Huggard ». Lehman, 315. Hughes «. Alexander, 606, 613. Hughes V. Taylor, 96, 98. Hughitt i>. Hayes, 465, 466. Huiburt, Matter of, 557, 558. Hunker «. Bing, 352. Hunt 1). DutoI)er, 69. Hunt 1). Jackson, 368. XXVI TABLE OF OASES CITED. Hunt c. Weiner, 269. Hunter o. U. S., 531. Huntington «. Clark, 600. Huntington v. Havens, 134. Hurlbert v. Deau, 233, 224, 236, 237, 334. Hurlbut V. Carter, 125, 126, 134, 136. Hurst, Matter of, 33, 41, 75, 311. Hurth V. Bower, 89.5, 540, 546, 548. Hutcheson n. Pesliine, 366, 869. Hutchins v. Hutchins, 305. Hutchinson v. Smitli, 142. Huyler v. We.stervelt, 420. Hyman, Matter of, 575. Hyman v. Kapp, 283. Hynes v. Campbell, 556, 557. Hyslop V. Clarke, 194, 317, 339, 240, 243, 249. Hyslop i>. Randall, 174. Irldings d. Bruen, 350, 483. Illinois Watch Co. v. Payne, 369, 285. Importers' vfc T. Nat. Bank v. Burger, 223, 209. Ingraham c. Geyer, 372, 380. Innes ». Lansing, 145, 332. Ireland v. Potter, 492. Irving V. DeKay, 241. Irving V. Humphrey, 600. Irwin B. Tabb, 533. Isidor, In re, 453. Iselin V. Dalrymple, 159. Iselin r. Henlein, 285, 286, 316. Ives, Jlatter of, 582, 586. Ives v. Davenport, 479. .Tack V. Robie, 471. .lackraan v. Mitchell, 607. Jackson v. Andrews, 347. Jackson v. Brownell, 193. .lackson v. Cad well, 243. Jackson v. Cornell, 233. 226, 376, 295. Jackson «. Losee, 175, 347. Jackson •». McCuUoch, 309. Jackson v. Parker, 249. Jackson o. Phipps, 116. Jackson v. Sheldon, 146. Jackson ii. Sloan, 424. .Jackson v. Smith, 88. Jacobs, In re, 11, 12, 66, 7S, 80. Jacobs V. Allen, 266, 431, 489. Jacobs «. Remseu, 159, 194, 264, 365, 298, 307, 319. Jacot V. Emmelt, 499. Jacquin v. .lacquin, 578. Jaeger ». Kellv, 370. JafEray v. McGelioe, 234. .laques ®. Greenwood, 278. Jaques ». Marquand, 61. Jaycox 1). Caldwell, 194, 314. Jeffres v. Cochrane, 346. Jellenik ;■. Mav, 304. Jenks V. Stebbins, 16, 18, 51. Jennings i'. Jennings, 53. Jermsiln i'. Pattison, 457. Jervis v. Smith, 532. Jeselsjn, Matter of. 527, 573, 574. Jessop i\ Miller, 442. Jessup i: Hulse, 153, 154, 240, 356. 334, 477, 478. Jewell i: Knight, 192. Jewett ». Noteware, 193, 183. Jewett V. "Woodward, 366, 314, 531, 556. Johnson, Matter of, 555, 556, 557, 573. Johnson v. Bennett, 483, 484. .Johnson ». Buckels, 284. Johnson v. Corbett, 535 Johnson i: Hunt, 365, 366, 368. Johnson r. Philips, 240. Johnson t. Rogers, 276, 310, 313, 315. Johnson c. Sharp, 377, 387. Johnson ». Worden, 54. Johnston c, Bennett, 174. Johnston «. Bloodgood, 464. Johnston c. Kelly, 198. Johnston v. Menitt, 494, 498. Jones, III re, 45, 509, 550. Jones i\ Bach, 164. .Jones v. Burkloy, 609. Jones V. East. Soc. of M. E. Church, 304. .Jones t\ Hausmann, 189, 440. 495. Jones V. Howard Ins. Co., 166. Jones V. Robinson, 475. Jones V. Syer, 351. Jones i>. Taylor, 870. Jones V. Tilton, 116. Jones V. Wright, 603. Jordan i\ Nat. Shoe & L. Bank. 464. Joslin V. Cowee, 442. Journeay *'. Brackley, 189, 494, 495, 496. Judd V. Gibbs, 220. Judson V. Abeel, 260, 296. Judson V. Gardner, 349. Juliand v. Rathbone, 130, 360, 399. Kaiu I'. Larkin, 335. Kane t\ Qott, 459, 505. Kane v. Ingraham, 55. Kaughran, Matter of, 510. Kavanagh v. Beck with, 238, 399, 301, 401, 523. Keeler v. Field, 444. Keep V. Lord, 464, 465. Keiley v. Duseub'iry, 160, 317, 507. Keller v. Paine, 374. Keller v. Payne, 332. Kellett V. Rathbun, 551, 553. Keiley v. Drury, 62. Kellogg c. Richards, 591. TABLE OF CASES CITED. XXVll Kellogg 1). Schuyler, 54. Kellogg ». Slauson, 236. Kellogg v. Slawson, 1.54, 155, 259. Kelly V. Baker, 138, 139. Kelly V. Ci-apo, 365, 390. Kelly V. Eckford. 338. Kelly V. Lane, 319. Kelstadt v. Reilly, 371. Kemp D. Carnley, 139. 223. Kendall «. Mellen. 447. Kennedy «. Strong, 48, 54. Kennedy v. Thorp, 285, 444. Kennedy v. Wood, 231, 276, 284, 303, 303, 305. Kerchlis v. Schloss, 157, 158, 160, 217, 234, 261. Kerr v. Blodgett, 836, 542, 548. Kerr?). Dildine, 331. Kessell «. Drucker, 208. Ketchum v. Clark, 546. 548, 559. KeteltasB. Wilson, 1-59, 194, 215,254, 274, 558. Kevan v. Branch, 155. Keyes i). Brush, 407, 457, 513. Kibbe v. Herman, 283, 304. Klerstcd v. Orange & A. R. R. Co., 496, 497. Kilpatrick v. Dean, 410. Kimball, Jn re, 54, 308. Kimball v. Hamilton Fire Ins. Co., 137. Kimball ». Lee, 377, 386. Kincaid «. Dwinelle, 200. King, In re, 100. King V. Donnelly, 163, 432, 509. King V. Fitch, 442. King u. Glass, 369. King -B. King, 479. King V. Talbot, 438, 498, 542. King V. Union Iron Co , 212. Kingsland «. Roberts, 544 Kingsleys. First Nat. Bank, 211. Kingston v. Koch, 168, 268. Kip V. Bank of New York, 48, 178. Kip V. Deniston, 501. Kip i>. Hirsh, 545, 583. Kipling V. Corbin, 377. Kirby v. Fitzgerald, 561. Kirby v. Fitzpatrick, 561. Kirby v. Schoonmaker, 141, 323, 237. Kirby ». Taylor, 604. Kitchen «. Lowery, 346, 430. KittellB. Osborn, 159. Kittredge «. Van Tassell, 214. Kluender v. Lynch, 214. Khimpp 1). Gardner, 139, 165. 220. Knapp V. McGowan, 111, 173, 173. Knauth v. Bassett, 234, 331. Knickerbocker L. Ins. Co. ». Patter- son, 497. Knight «. Cox, 590. Knight V. Hunt, 608. Kuighfs Trusts, In re, 523. Knower v. Central Nat. Bank, 343, 346, 350,353,355,522. Kuowles, Petition of, 533. Knox, Matter of, 183. Kobbe, Matter of, 184, 185. Koenig «. Steckel, 25. Koonz, In re, 452. Krauser ». Ruckel, 300. Kuehnemundt ». Haar, 457. Kurth, In re, 311. Lachemeyer, In re, 88. Lacker e. Rhoades, 182. La Coste r. Gillmnn, 54. Ladbroke v. James. 69. Ladew v. Hudson River B. & 8. Co., 13Q. Laidlaw v. Gilmore, 192. Lains, In re, 311. Lanalian v. Latrobe, 533. Lanckton «. Wolcott, 533. Landaur, Matter of, 453. Lane v. Wheelwright, 132. Langford e. Gascoyne, 490, 493. Lanning ®. Streeter, 320. Lansing «. Lansing, 489, 499. Lansing «. Prenderga'st, 54. Lansing ». Woodworth, 215, 250, 352, 253, 283. Larrabee v. Talbott, 10. Lashley ». Hogg, 548. Lathrop v. Clapp, 336. Law «. Bagwell, 363. Law V. Mills, 371, 380. Lawrence «. Bank of Republic, 183, 330, 334, 464, 466. Lawrence «. Clark, 606, 612, 613. Lawrence v. Davis, 124, 125, 155, 163. Lawrence v. Kuowles, 440. Lawrence v. Norton, 190, 343, 249. Layson v. Rowan, 161. Leach «. Kelsey, 177. Leahy, In re, 400. Leavitt v. Baldwin, 57. Leavitt t. Blalchford, 133, 133, 192. Leavitt v. Yatea, 353, 357. Lee V. Curtiss, 40, Lee ». Gamble, 66. Lee V. Kilburn, 1. Leger v. Bonnaflfe, 420. Leggett D. Hunter, 433. Lehman v. Bentley, 113. Leicester «. Rose, 609. Leipziger, Matter of, 576. Leitch V. Hollister, 113, 114, 172, 173. Leitch «. Wells, 345, 347. Lemay v. Bibeau, 523. Lenke d. Booth, 54. Lent V. McQueen, 837, 513. xxvm TABLE OF CASES CITED. Lentilhon v. MoflEat, 160, 343, 349. Leonard v. Clinton, 446. Leonard c. Nye, 181. Le Page d. MoCrea, 590. Leslie, Matter of, 575. Lester v. Cliristalar, 57, 63, 65. Lester ». Pollock, 333, 333, 339, 358. Lester v. Thompson, 31, 51. Letson ». Kenyon, 583. Levy V. Dolbell, 30. Levy V. James, 313. Levy V. Salomon, 86. Levy's Accounting, 160. 367, 430, 479, 480. 481. 554, 560, 573. Lewenthal, Matter of, 524, 565, 574. Levris, Matter of, 118, 431, 521. Lewis V. Bache, 387. Lewis V. Burr, 189, 494. Lewis V. Graham. 459. Lewis V. Hake, 543. Lewis V. Jones, 590, 595, 604. Lewis V. Miller, 111. Lewis V. Page, 36, 38. Lewis D, V.S., 531. Libby v. Rosekrans, 419, 420. Linder v. Lewis, 309, 310. Lindsay v. Jackson, 465. Lindsay v. Limbert, 495. Lindsley v. Diefendorf, 345. Link, Matter of, 498, 536. Lipman v. Lowitz, 601. Lippincott v. Barker, 343. Litchfield v. Pelton, 381. Litchfield v. White, 153, 154, 265, 431, 441, 488, 489. Littell, Matter of, 557. Littenu. Dal ton, 55. Little «. Chadwick, 179. Littlefield v. Albany Co. Bank, 465. Livermore v. Jenckes, 380. Livermore v. Northrup, 337, 276, 301. Livermore v. Rhodes, 377. Livingston v. Livingston, 431. Livingston v. Oaksmith, 69. Livingston's Petition, 514. Lloyd V. Neele, 53. Lloyd V. Peell, 53. Lockwood V. 'Thorne, 545. Lodge V. Phelps, 370. Loeschigk v. Addison, 142. Loeschigk v. Baldwin, 113, 283. Loeschigk v. Hatfield, 142. Loeschigk v. Jacobson, 354. Logan V. Anderson, 533. London v. Martin, 209. Long V. Girdwood, 379, 383, 386. Longridge v. Dorville, 590. Loomis V. Brown, 333. Loos V. Wilkinson, 177, 368, 379, 383 395. 303, 304, 305, 306, 335, 351, 445, 451. Loring i'. U. S. Vulcanized G. P. Co., 138. Lothrop V. Highland Foundry Co., 10. Loucheim's Appeal, 596. Louis V. Belgard, 333. Loving V. Pairo, 369. Low V. Graydon, 315, 344. Lowell, Matter of, 99. Lowenberg v. Levine, 64. Lowenstein v. Flauraud, 138, 164. Lower v. Clement, 596. Lowery v. Clinton, 333. Lucas V. Sunbury & Erie R. R. Co., 113. Lucas V. Tucker, 369. Ludington's Petition, 110, 116, 134, 535, 540, 544. Ludlow V. Hackett, 71. Ludlow V. Simond, 539, 541. Luther v. Deyo, 53, 83, 87. Lux V. Davidson, 319, 321. Lynch v. Reynolds, 59. Lyon V. Chase, 544. Lyon u. Davis, 214. Lyon V. Plainer, 259. Lyon V. Zimmer, 314, 315. McAllaster v. Bailey, 330. Macauley v. Smith, 338, 331. McBlain v. Speelmau, 167. McButt V. Hirsch, 324. McCabe v. Fowler, 503. McCahill v. Hamilton, 545, 582. McCall V. Hinkley, 243. McCallum, Matter of, 628. McCarthy v. Fitts, 336. McCarthy v. McDermott, 393. McCarthy v. Wright, 470. McCartney v. Bostwick, 331. McCartney v. Welch, 313. McClelland v. Remsen, 113, 137, 170, 173, 316, 247. McComb V. Waldron, 479. McOonihe v. Derby, 291. McConihe v. Fales, 447. McConnell v. Sherwood, 238, 262, 263, 325.' McDaniels v. Lapham, 590. McDermut v. Lorillard, 483. McDonald v. Bayne, 184. McDonald v. Davis, 56. MacDonald u. Moore, 309, 310, 352, 355. MacDonald v. Wallstein, 303. McDuffie V. Clark, 305. McEIwain v. Willis, 330, 328. McGoon V. Scales, 369. Mcllhargy 1). Chambers, 168. Mclntyre v Warren, 545. McKee v. Judd, 174, 175. McKenzie v. L'Amoureux, 542. TABLE OF CASES CITED. XXIX Mackenzie v. Mackenzie, 604. Mackie «. Cairns. 190, 191, 194, 239 242, 247, 249. Macklnnon «. Stewart, 115. Mackintosh v. Corner, 522. McLaren v. Pennington, 466. McLean v. Button, 248. McLean v. Prentice, 314, 336. McMalion v. Allen, 177. McMahon v. Slierraan, 166, 456. McMenomy v. Roosevelt, 194. McMillan v. McNeill, 62. McMurray v. Hutcheson, 424. McNair v. Gilbert, 28, 30, 71, 72. McNeilly v. Richardson, 44. McQueen v. Babcock, 437, 456, 457. McWhorter v. Benson, 492. Maack v, Maack, 217, 522. Maas V. Falk, 112, 114, 172, 202, 254. Maas V. Goodman, 175. Mabbett v. White, 137. Mabbott V. Van Beuren, 68, 70. Mace V. Wells, 55. Mack V. Davidson, 299. Madersu. Whallon, 335. Magee v. Kast, 596. Magnus, Matter of, 460, 506. Main v. Green, 187. Malin v. Malin, 462. Manahan, Jn re, 308, 573. Manahan v. Gibbons, 502. Man by v. Scott, 4. Manchester v. Tibbetts, 214. Mandel v. Reay, 269 . Mandeville c. Reed, 424, 425. Manhattan Oil Co. v. Thorn, 70. Manice v. Manice, 427. Manley v. Bonnel, 338. Mann v. Witbeck, 152, 236, 264, 441. Manning v. Beck, 202, 205, 208. Manning v. Manning, 438, 498. Manning v. Stem, 337, 453, 511, 513. Marbury v. Brooks, 269. Marine Bank d. Clements, 136. Marklin, In re, 481, 482,554, 555, 556, 574. Marquand,' Matter of, 491, 492. Marsh v. Dunckel, 2. Marsh v. Wendover, 187. Marshall «. Smith, 561. Martin «. Adams, 611. Martin v. Black, 189. Martin v. Kunzmuller, 464. Martin v. Potter, 886. Marline v. Robinson, 138. Martine v. Willis, 464. Mason «. Haile, 11, 12, 66. \ Masons. Knowlson,464. Mason v. Martin, 477. Mason v. Vere, 6. .^ Mather, Matter of, 493, 552. Mather v. Bush, 7, 12, 60, 61, 69. Mather's Case, 89. Mathews v. Duryee, 188. Mathews «. Poultney, 155, 156, 296, 302. Mattison v. Demarest, 232, 407. Maxwell, Matter of, 556, 577. May, Matter of, 498, 552. May v. First Nat. Bank, 384, 385. May «. Wanuemacher, 116, £,66, 389. Maybin, In re, 54. Mayer, In re, 511. Mayer s. Hazard, 351, 352, 354. Mayer v. Hellman, 117, 194, 273, 3C8. Maynard d. Maynard, 521. Meachim «. Sterues, 159, 255, 258, 479, 481, 558. Mead v. Phillips, 160, 162, 195, 249, 266, 269, 295, 298, 357. Meador«. Sbarpe, 54. Means v. Dowd, 249. Means v. Hapgood, 389. Mechanics' Bank v. Hazard, 68. Mechanics' Bank, Matter of, 511. Mechanics' and Farmers' Bank v. Capron, 53, 58. Medburj' v. Swan, 67. Meekins t. Creditors, 10. Melick V. Voorhees, 478. Mellen, Matter of, 510. Mellen v. Banning, 301. Mellen «. Goldsmith, 592. Mellen ■». Hamilton Fire Ins. Co., 437. Menaghs. Whitwell, 141, 225, 231. Merchants' Bank «. Moore, 55. Merrill ■». Grinnell, 175. Merritt v. Arden, 71. .. Merritt «. Sawyer, 461. Merry ». Sweet, 16, 28, 31. 33. Merwin, Matter of. 524, 565, 574. Mesick «. Mesick, 502. Messonnier ». Kauman, 360. Metcalf t. Del Valle, 327, 332, 346. Metcalf V. Van Brunt, 162, 265, 360. Meth. Epis. Church v. Jaques, 554, 559. Metzger u. Metzger, 552, 553, 554. Meux v. Howeli, 273. Meyers ». Becker, 355. Mickles ■». Brayton, 57. Micou V. Lamar, 498. Middle Dist. Bank Receiver, In re, 466. Middleton «. Oi.slow, 607, 609. Midgeley v. Slocomb. 581, 533. Milbank v. Welch, 211. Miller, Matter of, 514. Miller v. Hall, 334. Miller v. Halsey, 177, 283, 288 291. Miller «. Kernaghan, 372. Miller 1). Proctor, 491. Miller v. Sherry, 345. XXX TABLE OF CASES CITED. Miller's Appeal, 533. Milliken v. Dart, 183, 339, 283, 818. Mills V. Argall, 145, 146, 312, 813, 361. Mills V. Goodenough, 446. Mills V. Levy. 243. Mills D. Paikhurst, 109, 196, 313, 316. Milae v. Moreton, 365. Mims V. Armstrong, 156. Minuse -d. Cox, 488, 500. Miuzesheimer p. Mayer. 307, 338. Mitchell V. Bartlett, 168. Mitchell o. Stewart, 545. Mitchell V. AVest, 294. Moale V. Buchanan, .522, Mohawk. Bank v. Atwater, 328. Mohrmann v. Bush, 546. Moir V. Brown, 115, 149, 157 168, 259 432 Molleru. Tiiska, 313. Monell V. Monell, 501, 502. Monger v. Kett, 600. Monroe v. Upton, 51, 68. Montgomery v. Lampton, 614. Mooers v. White, 544. Moore, Matter of, 91. Moore v. Battin,378. Moore v. Bonnell, 377, 378, 886. Moore v. Church, 383. Moore v. McMahon, 89. Moore v. Jleyer, 202. Moore v. Paine, 55, 56. Moore v. Viele, 59. Moore v. Willett, 371, 380, 390. Moran v. Secord, 90. Morewood v. HoUister, 4, 16, 18, 24. 45, 75. Morgan, Matter of. 392, 395, 430, 572. jNIorris v. Pales, 534. Morris v Morris, 282. Jlorrison v. Atwell, 220, 229, 264, 817. Morrison v. Brand, 24i, 257. Morrow v. Freeman, 16, 19, 51, 70. Morse, In re. 513. Morse v. Hovej% 55. Morton v Ostrom, 590. Morton v. Pinckney, 190, 440. Moseley v. Moseley, 242. 316. Moses V. Katzenberger, 613. Moses V. Murgatroyd, 124. Moses V. Raulet, 533. Moss V. Shannon, 590. Mosselman v. Caen, 366, 368. Mott V. Dunn, 334. Mott V. Maris' Assignees, 530. Mottram v. Heyer, 423, 423. Movan «. Hays, 382, 463. Mower, Matter of, 81. Mowry v. Crocker, 380, 389. Jloyer v. Dewey, 446. Muchmore v. Budd, 173. JIuir V. Glinsman, 495. Muiri). Schenck, 181, 389. MuHer v. Norton, 260. Mullin V. Sisson, 151. Mumford, Matter of. 180, 430. Mumford v. Canty, 373. Mumford v. Murray, 438, 490, 503, 503. Mumper v. Ru-;hmore, 294, 421. Munger v. Albany City Bank, 465. Murphy v. Abrams, 144. Murphy r. Bell, 236, 355, 363. Murphy «. Philbrook, 61. Murray, In re, 537. Murray «. Ballou, 340, 341, 846. Murray v. Blatchford, 847. Murray ». De Rottenham, 4. Murray v. .Tudah, 53. Murray v. .ludson, 113, 118, 301. Murray u. Lylburn, 344, 346. Murray d. Riggs, 190, 194, 249, 251. Murray c. Smith, 525. Mussey v. Noyes, 115. Myers, Matter of, 498. Myers v. Becker. 358, 859, 578. Myers v. Davis, 464. Myers v. Hunt, 189, 494. Mygatt v. Wilcox, 492. Nassau Bank v. Ritzinger, 377. Nassau Bank «. Yandes, 820, 377. Nat. Bank «. Insurance Co. , 179. Nat. Bank v. Sackett, 189, 165. Nat. Bank of Chemung ». City of El- mira. 16. Nat. Bank of Granville v. Cohn, 332, 340. Nat. Bank of Troy v. Scriven, 138, 140, 165, 363. Nat. Broadway Bank r. Wessell Metal Co., 129, 131. Nat. Butchers' & D. Bank v. Hubbell, 180, 350, 353. 355, 442, 443. Nat. Butchers' & D. Bank v. Wilkin- son, 179. Nat. Park Bank p. Goddard, 328. Nat. Park Bank c. Whitmore, 148, 213, 3:!4. Nat. Tradesmen's Bank v. Wetmore, 835, 339, 831. Nat. Union Bank v. Reed, 384. Neff's Appeal, 491. Negus, Matter of, 430. Nelson, In re, 563. Nelson v. Bridport, 370. Nflson «. Edwards, 135, 475. Nelson r. Tenney, 142. Neslin «. Wells, 280. Neustadt d. Joel, 327. Newcomhe v. Irving Nat. Bank, 836. NewEng. Iron Co. B.Gilbert El. R. R. Co., 425. Newlin v. Lyon, 804, 307, 464. TABLE OF OASES CITED. XXXI Newman v. Cordcll, 286, 302. Newton «. Bronson, 487. Newton «. Porter, 178. Newton v. Scott, 54. N. Y. Life Ins. Co. -c. Mayer, 188, 343. N. Y., L. E. & W. R. R. Co. «. Rob- inson, 387. N. Y., P. & B. R. R. Co. V. Dixon, 228. N. Y. Steam Co. ■». Stern, .WS, 582. Niagara Co. Nat. Bank ». Lord, 448, 541. Nicholas, Matter of, 892. 427, 540. Nicoll ». Mumford, 113, 115, 116, 117, 124, 125. Nicoll 1). Spowers, 167. Nichols ®. McEwen, 160, 196, 316, 259, 265, 430, 556. Nichols «. Pinner, SOI, Nichols «. Wellings, 214. Nicholson v. Leavitt, 158, 195, 221, 223, 349, 257, 2.59, 273, 374, 358, 369, 870,. 441, 522. Nightingale v. Harris, 243. Noble «. Halliday., 454. Noble V. Johnson, 70, 74. Noble V. Kelly, 590. Noble V. Smith, 377, 388, 389. Nonotuck Silk Co. v. Flanders, 179. Nordlinger v. Anderson, 222, 226. Norman v. Thompson, 591, .594. Norris v. Atkinson, 65. Norris' Appeal, 439. North River Bank v. Schumann, 273, 275, 289, 293, 442, 482. Northev v. Field, 423. Nortonu. Matthews, 160, 240, 249, 352. Noyes, In re, 556. Noyes v. Blakeman, 353, 492, 556. Noyes v. Burton, 424. Noyes V. Morris, 307. Noyes v. Wernberg, 895, 540, 543. Noys V. Mordaunt, 313. Gates V. Haley, 434. O'Brien, Matter of, 564. Ocean Nat. Bank v. Olcott, 329. Ockerman v. Cross, 134, 151, 378. O'Connell v. Sutherland, 36, 38, 39, 51. O'Conner v. Gifford, 855. O'Connor v. Debraine, 74. O'Gara v. Kearney, 578. Ogden V. Arnot, 141. Ogden V. Cowley, 464. Ogden V. Peters, 153, 256, 375, 441. Ogden V. Prentice, 242, 459, 467, 468. Ogden V. Saunders, 10, 11, 12, 60, 61, 62, 64, 66, 365. Olcott «. Robinson, 35. Oliver Lee & Oo.'s Bank v. Talcott, 171, 336, 246. Olmstead ». Herrick, 148, 3:5. Olney v. Tanner. 296, 332. Olyphant v. Atwood, 13, 60, 68. Oneida Bank v. Ontario Bank, 178. O'Neil V. Nagle, 374. O'Neil V. Salmon, 194, 227, 229, 239, 240. Ontario Bank v. Mumford, 461. Ontario Bank v. Root, 314. Oroutt V. Orras, 479. Ormiston v. Olcott, 502. Orphan Asylum Soc. v. McCartee, 511. Orsor. In re, 481, 575. Osborn v. Adams, 365, 369. Osborn v. Thomas, 435. Osborne v. Barge, 140. Osborne v. Moss, 343. Osgood V. DeGroot, 475. Osgood V. Franklin, 478, 489. Osgood V. Ogden, 467. Otis «. Bertholf , 208. Otis V. Hitchcock, 16, 18. Otis V. Hodgson, 151, 456. Oughton i;. Trotter, 605. Owen V. Routh, 53. (Jusley V. Cobin, 54. Pach V. Gilbert, 331. Pacific Mutual Ins. Co. v. Machado, 296. Paddock, In re, 149. Page V. Broom, 363. Page V. Bussell, 55. Paige V. Cagwin, 304. Paige V. Waring, 421. Paige & S. Lumber Co., In re, 382. Paine, In re, 421. Paine v. Lester, 366, 877, 384, 389. Palmer v. Hutchins, 68, 70. Palmer v. Mason, 372, 377. Palmer v. Myers, 139. Palmer v. Palmer, 546, 548. Palmer v. Smith. 316. Palmerton v. Huxford, 590. Pancoast v. Spowers, 167. Pardo V. Osgood, 475. Parker, In. re, 409, 508. Parker v. Conner, 270. Parker D. Hesseltein. 88. Parker v. Jervis, 293, 441. Parkinson v. Scoville, 62, 68. Parks V. Jackson. 347. Parmelee v. Egan, 334. Parr, Ex parte, 532. Parshall v. Tillou, 328. Parsons t). Lyman, 871. Partridge v. Havens, 486. Passavant v. Cantor, 385, 305, 307 336. Paton «. Wright, 138, 233. XXXll TABLE OF CASES CITED. Patrick v. Wiirner, 88. Patterson v. Boehm, 608, 613. Patton V. Royal B. P. Co., 424. Paulding v. Chrome Steel Co. , 2, 310. Paulding v. Sharkey, .501. Payler v. Homersham, 600. Payne v. Elden, 613. Payne v. Sheldon, 338. Payne v. Smith, 587. Peai-ce, Matter of, 96. Pearce v. Beacli, 149. Pearpoint v. Graham, 343. Pease v. Batten, 304. Peck V. Grouse, 306. Peck V. Hozier, 66. Peck V. Randall, 500. Peckham v. Mattison, 380. Penniman v. Elliott, 604, 606. Penniman v. Meigs, 63. People ex rel Lodowick i\ Akin, 76. People V. Assessors of Watertown, 133. People V. Ballard, 136. People V. Bancker, 91. People V. Beigler, 487. People V. Brennan. 89. People V. Brooks, 91, 93, 100, 101. People V. Campbell, 88. People V. Chalmers, 110, 413, 565. People V. City Bank of Roch., 179. People V. Cowles, 88. People ex rel Pacific Mail S. S. Co. v. Com'rs of Taxes, 390. People ex rel Lewis v. Daly, 36, 75. People ex rel Borst u. Grant, 359, 578. People ex ni Cohen v. Grant, 86. People ex rel Lust v. Grant, 86. People ex rel Rodding v Grant, 86. People ex rel Demarest v. Gray, 35, 38. People ex rel Ritterman v. Kelly, 83. People ex rel Olin v. Lockwood, 556. People ex rel Pacific Mut. Ins. Co. v. Machado, 16, 18. People V. JIarine Court, 53, 83, 87. People ex rel Smith v. MuUin, 87. People V. National Trust Co., 498. People V. Norton, 509, 516. People V. O'Brien, 81. People V. Remington, 300, 532. People ex rel Fries v. Rilej', 378. People V. Soper, 428. People V. Strvker, 16, 30, 31, 40, 70, 73, 74. People u. Supervisors of Niagara, 132. People ex rel. Kenyon v. Sutherland, 37, 39. People V. Tioga Com. Pleas, 174. People «c rel, Cauflman i>. Van Buren, People't). White, 96, 413, 414. People's Bank v. Fancher, 337. Perkins, In re, 511, 513. Perkins v. Lockwood, 591. Perry u. Bedell, 296. Perry v. Jackson, 594. Perryw, JSx parte, 512. Person v. Oberteuffer, 185. Persse & Brooks Paper Works v. Wil- lett, 290, 302. Petchell, Matter of, 479, 481, 482. Peters v. Bain, 179, 369. Peters ". Henry, 87. Petersen v. Chemical Bank, 866. Petree v. Lansing, 543. Petrie v. Petrie, 542. Pettee v. Orser, 138, 140. Peyser v. Myers, 336, 230, 298, 350, 351, 587. Pfleger v. Browne, 609. Phelps V. Borland, 867. Phelps V. McDonald, 181. Philipe V. James, 69. Philips, Matter of, 34. Phillips, Matter of, 576. Phillips V. Phillips, 490. Phillips V. Prevost, 544. Phillips V. Tucker, 800, 402, 403. Philson V. Barnes, 879. Phvfe V. Riley, 420. Pickett V. King, 582. Pickett V. Leonard, 588. Pickstock V. Lyster, 117, 374. Pie, Matter of, 83. Pierce v. O'Brien, 373. Pierce v. Pierce, 590. Pierce v. Wood, 608. Pierce & Holbrook, In re, 310. Pierson, Matter of, 45. Pierson v. Manning, 163. Pilzemayer v. Walsh, 496. Pine V. Rikert, 373, 393, 356, 436, 441, 480. Pingreo v. Comstock, 155, 491. Pinnel's Case, 589. Pinneo v. Higgins, 606, 613, 613. Pittsburg* S. R. R. Co. 's Appeal, 535. Pittsfield Nat. Bank v. Taller, 371, 388, 384, 403. Place V. Miller, 334, 276, 818. Planck V Schermerhorn, 113, 147, 159, 367, 375, 398. Piatt V. Archer, 853, 354. Piatt V. Hedge, 161. Piatt V. Hunter, 137. Piatt u. Lott, 157, 386. Piatt V. Preston, 309. Piatt V. Sherry, 395. Piatt V. Stewart, 423. Plestoro V. Abraham, 365, 386, 390. Plume & AtwoodMfg. Co. v. Strauss, 409. TABLE OP CASES CITED. XXXlll Plummer, Exparte, 533. Pond V. Comstock, 350. Pool V. Ellison, 283. Poole ». Pass, 354. Pope V. Briggs, 542. Pope V. Cole, 3. Porter v. Williams, 357, 832, 360, 361. Post V. Kimbeiiy, 539. Post V. Riley, 55. PosthofE V. Bauendahl. 321, 336. Posthoff V. Schveiber, 331, 325. Potter, Alatter of, 392, 429, 583. Potter V. Durfee, 393, 439. Powell V. Eason, 55. Powell V. Evans, 490. Power V. Alger, 537. Powers V. Carpenter, 190, 463, 495, 497. Powers V. Graydoa, 172, 315, 244, 345, 247, 317. Powers V. Savin, 186. Powers V. Witty, 76. Pratt V. Adams, 161, 801, 312, 313, 521, 523, 528. Pratt u. Chase, 12, 61, 62, 64. Pratt V. Levan, 189. Pratt V. Rathbun, 548. Pratt V. Stevens, 288, 400, 401, 404, 406. Prentiss Tool & S. Co. v. Schirmer, 339. Preston v. Spaulding, 301. Price V. Haynes, 187. Price V. Holman, 499. Price V. Murray, 457. Price V. Orcutt, 98. Price V. Peters, 68. Prince v. Bartlett, 4, 529. Princeton Mfg; Co. ■». White, 389. Pringle v. Woolworth, 535. Pritchard v. Pritchard, 578. Produce Bank v. Baldwin, 400, 405. Produce Bank v. Morton, 358, 400, 405. PuUen V. Hillman, 63, 65. Piilver, Matter of, 38. Pulver V. Harris 174. Putnam v. Hubbell, 194, 368. Putnam v. Russell, 533. Putzel «. Schulhof, 291, 335. Quackenbush v. Leonard, 478. Queen v. Saddlers' Co., 3, 4. Quimby v. Sloan, 424. Rabel v. Griffin, 180. Radtke, Matter of, 578. Ralph V. Brickell, 328. Randall v. Dusenbury, 166, 492. Randall v. Parker, 391. Randall & Sunderland. In re, 1, Ranger, In re, 535, 538. Ranney v. Stringer, 471. ^. C Ransom, Matter of, 436, 469, 476, 566. Ransom v. Keyes, 53. Ransom v. Van Deventer, 335. Riipaloe V. Stewart, 357, 260, 314. Rathbone v. Warren, 539. Rathbun v. Platner, 171, 194, 195, 216, 368. Rathbun v. Rathbun, 169. Rauth, III re, 481, 509, 556, 558. Ravenshaw v. Hollier, 863. Ray V. Boarart, 544. Ravmond,"Miitter of, 177, 447. Raymond v. Johnson, 366, 368, 461. Raymond v. Merchant, 58. Raymond v. Richmond, 443. Rayner v. Pearsall, 544. Raynor v. Raynor, 156, 187. Read v. Worthington, 315, 336, 353, 354, 399, 513. Reamer v. Lamberton, 147. Reay t;. Richardson, 599. Reay u. White, 599. Receiver of Middle Dist. Bank, In re, 466. Receiver of State Bk. of N. B. v. First Nat. Bk. of P., 377. Reed u. AUerton, 500, 508, 509. Reed v. Emery, 148, 149, 513. Reed v. Gordon, 74. Reed v. Mclntyre, 117, 194, 373, 376, 808, 310. Reed v. Sands, 175, 431. Reed v. Taylor, 11. Reeves v. Lambert, 30. Regina Flour Mills Co. v. Holmes, 63. Reichenbach v. Winkhaus, 168, 351. Reiman & Friedlander, In re, 13, 60. Reitz V. People, 55. Remseu v. Remsen, 546, 551, 553, 559. Renard v. Graydon, 244. Renard v. Hargous, 17, 29. Renard v. Maydore, 244. Renard v. Tuiler, 594, 595, 605. Rennie v. Bean, 151, 162, 167, 334. Renton v. Kelly, 351, 4s0. Reubens v. Drake, 534. Reubens u. Joel, 337, 334. Revere Copper Co. v. Dimock, 56. Rex V. Watson, 274. Reynolds, Ex parte, 513. Reynolds, In re, 10. Reynolds v. Adden, 366, 387. Reynolds v. Ellis, 445, 449. Rhawn v. Pearce, 365, 368. Rhoads v. Blatt, 156, 187. Rhode Island Cent. Bank v. Danforth, 881. Rice, Matter of, 481. Rice V. Courtis, 380. Rich V. Salinger, 70. Richards v. La Tourette, 465, 466. XXXIV TABLE OF CASES CITED. Richards v. Ludington, 457. Richardson v. Mead, 462. Richardson v. Pierce, 604. Richardson v. Thiirber, 197, 198. 305. Richardson v. Trimble, 337. . Richardson v. Wyman, 533. Richmond v. Praim, 51, 98. Richtmeyer v. Remsen, 174. Rider, In re, 427, 487, 491. Ridgeley v. Johnson, 432, 433, 508. llieser. Matter of, 230, 537. Riessner v. Cohn, 204, 305, 308, 332. Riggs V. Murray, 158, 196, 351. Rindskopf, In. re, 453. Rinchey v. StryUer, 319. Ringo V. Biscoe, 125. Ripley, Matter of, 422. Risley, Matter of, 498, 537, 536, 573. Ritchie v. Garrison, 63. Robbins v. Butcher, 253. Robens v. Sweet, 70. Roberts, Matter of, 76, 78, 79 96, 97, 98. 106, 107. Roberts v. Albany &W. S. R. R. Co., 346. Roberts v. Anderson, 356. Roberts v. Atherton, 6o. Roberts v. Brandies, 591. Roberts v. Buckley, 288, 389, 399, 401, 403. Roberts v. Carter, 464, 468. Roberts v. Prosser, 501. Roberts v. Shepard, 138, 139, 281. Roberts v. Tobias, 198. Roberts v. Victor, 318, 236, 288, 298, 401, 403, 522. Robertson v. Armstrpng, 493. Robertson v. Smith, 56. Robins v. Enibry, 125. Robinson, Matter of, 394, 508, 511, 514. Robinson v. Bank of Attica, 128, 133. Robinson v. Crowder, 137. R. Bowery Sav. Bank, 506. Schneider v. Altman, 336. Sclinitzler v. Andrews, 432. Scholield v. Scott, 268, 307, 314. Scliolle V. Scliolle, 485. Sclioonmaker v. Kelly, 443. Schroder v. Tompkins, 378, 387. Schroeder v. Walsh, 301. Schuehle v. Reiman, 395, 540, 543, 547. Schufeldt V. Abernethy, 259. Schuler v. Israel, 378. Schultz V. Pulver, 493. Schuman v. Peddicord, 171. Schwab V. Kaughran, 235, 270, 271, 385, 386, 387. Schwartz v. Soutter, 146, 362. Scidmore u. Smith, 395. Scofleld V. Spaulding, 303, 304, 305, 307. Scofield V. Whiteleege, 443. Scott V. Edes, 523. Scott V. Grant, 68. Scott V. Guthrie, 124, 160, 167, 221, 329, 235, 247, 317, 318. Scott V. Mills, 162. Scott V. Neely, 329. Scouton-u. Bender, 343, 351, 357. Scouton V. Eislord, 71. Scoville V. Canfleld, 370. Scribner v. Fisher, 63. Scudder v. Van Amburgh, 344. Seaman v. Stougbton, 309, 544. Sedgwick, Matter of, 107. Sedgwick v. Cleveland, 461. Selden v. Vermilya. 581. Selligman v. Wallach, 326. Sells V. Hubbell's Adm'rs, 462. Service v. Heermance, 69. Servis v. Holwede, 287. Sewall V. Russell, 147, 250. Seymour, /;* re, 54. Seymour ». Dunham, 466. Seymour v. Minturn, 590. Seymour v. "Wilson, 193, 302. Shaffer v Risley, 93. 104. Shand v. Hanley, 342, 349, 358. Shanks v. Klein, 143. Shauer v. Alterton, 270. Shaw, Matter of, 558. Shaw V. Dwight, 338, 330. Shearer v. Loftin, 125. Shears v. Solhinger, 10, 11, 66. Sheehan, In re. 53. Sheldon v. Blauvelt, 381, 383. Sheldon v. Dodge, 158, 183, 217, 31H, 238, 253,261. Sheldon v. Smith, 140, 360, 537. Sheldon v. Slryker, 295, 355. Sheldon v. Wheeler, 384. Shepard v. Rhodes, 614. Shepardson's Appeal, 11. Shepherd v. Hill. 373, 480. Shepherd v. McEvers, 149, 433, 486, 508. Sheridan u. Mayor, etc., of N. Y., 463. Sherman v. Burnham, 459, 463. Sherman v. Elder, 174, 336. Sherman v. Jenkins, 140, 320. Sherrill v. Hopkins, 63. Sherrill Roper Air Eng. Co. v. Har- wood, 324. Sherryd, Matter of, 31. Sherwood v. Milford State Bank, 179. Ship brook v. Hinchinbrook, 490. Shipman, In re, 332. Shipman v. Lansing, 466. Shipman's Petition. 393, 468. Shook V. Shook, 433, 433, 504. Short V. Medberry, 200. Shriver i;. Shriver, 486. Shryock v. Bashore, 11. Shultz V. Hoagland, 147, 158, 170, 237, 248, 371, 285, 387, 388, 289, 301, 401, 402, 403, 407. Sibell V. Remsen, 138, 129. Sicard v. Whale, 66. Sickle, Matter of, 326. Sidle, In re. 53. Siedeiibach v. Riley, 293. Sillcocks V. Gallaudet, 185. Silsbury v. McCoon, 334. Siramonds v. Palles, 363. Simon v. Kaliske, 167, 187. Simpson v. Gowdy, 458. Sinclair v. Jackson, 433. Sinclair v. Oakley, 409. Sisson, Matter of, 309. Sixth Ward Bldg. Assoc, v. Willson, 522. Skaife v. Jackson, 590. Skinner t;. Oettinger, 285, 319. Slade V. Van Vechten, 421. Slatter v. Carroll, 369. Slidell V. McCrea, 23, 28, 30. Sloan u. Birdsall, 247,248. Slocum V. Barry, 471. Small V. Graves, 19 23, 31, 73. Small V. Ludlow, 441. Small V. Wheaton, 16, 33, 36, 70, 75. Smedley v. Smith, 134, 166, 363. Smith, Kx parte, 53. . XXXTl TABLE OP CASES CITED. Smith, Matter of, 511. Smith V. Aclier, 293. Smith V. At wood, 370. Smith V. Bellows, 154, 363. Smith V. Bennett. 53, 69. Smith V. Boyd, 165, 167, 234. Smith V. Boyle, 165. Smith V. BrinkerhofE, 464. Smith V. Bromley, 6U9. 613. Smith V. Chicago & N. W. R3\ Co., 371, 389. Smith V. CLirendon, 228, 279, 287. Smith V. Craft, 213. Smite V. Cuff, 612. Smith V. Danzig, 129. Smith V. Dresser, 334. Smith V. Felton, 465, 466. Smith V. Pox, 465. Smith V. Gardner, 62. Smith V. Hartwel], 108. Smith V. Howard, 142, 229, 232, 241. Smith V. Hurst, 363. Smith V. Longmire, 320. Smith V. Mitchell, 190. Smith V. Newell, 409, 410. Smith V. N. Y. Consol. Stage Co., 126, 338. Smith V. Payne, 445. Smith V. Ferine, 214, 216, 227, 228, 285, 287, 299. Smith V. Reid, 324. Smith V. Salomon. 600, 601. 608. Smith V. Smith, 230, 299, 438. Smith V. Spinolla. 66. Smith V. Stone, 594. Smith V. Tighe, 538, 545. Smith V. Tim, 165. Smith V. Wagner, 494, 496. • Smith V. White, 350. Smith V. Wise, 350, 351, 3.53. Smith V. Woodruff. 115, Ib'i, 243. Smith V. Zeigler, 614. Smith's xVppeal, 363, 372, 383. Smyth, flatter of. 186. Snei'ily v. Read, 614. Solinger v. Earle, 613. Sorlo're v. Scott, 542. Sortwel V. Jevvett, 371. Soule V Chase, 25, 31, 35, 36, 38, 40, 51, 62, 65, 70, 74. South Boston Iron Co. v. Boston Locora. Works, 365. Southard v. Benner, 177, 327, 332, 445. Southern B'k v. Wood, H90. Southworth v. Sheldon, 259. Soutten V. Soutten, 55. Spalding v. People, 54, 88. Sparks v. Andrews, 97. Spaulding v. Strang, 192, 244. Spear t). Tinkham,439. Spear v. Wardell, 101, 219, 311. Speeds. May, 370, 371,388. Spelman v. Freedman, 177, 204, 205, 206, 208, 279, 333. 445, 447, 451. Spelman v. Jaffray, 205. Spencer, Matter of, 498. Spencer v. Barber, 468. Spencer v. Beebe, 69. Spencer i\ Hodgman, 199. Sperry v. Baldwin, 302. Spies V. Boyd, 248. Spies i>. Joel. 172, 173. Spooner v. Whiston, 608. Spragne v. Kneeland, 304. Spring V. Short, 177, 283, 445, 446. Spring V. Strauss, 157. Springville ilfg. Co. v. Lincoln, 184. Spurret v. Spiller, 607. Stadclman u. Loehr, 140. Stafford, Matter of. 438. Stafford v. Bacon, 613. Stafford v. Ingersol, 395. Stafford v. Jlerrill, 215, 2.52, 298, 335. Standard Wagon Co. v. Nichols, 183, 184. Stanford v. Lockwood, 187, 456. Stanley «. Nat. Union Bank. 192, 214. Stanton i'. Ellis, 16, 28, 29, 30, 36, 38, 50, 51, 70, 74. Stanton u. Westover. 142, 231, 232. Starin v. Kelly, 268. Starr v. Duga'n, 522. Starr u. Pattereon, 31. State V. Keeler, 155. State of Maryland v. Bank of Mary- land, 125, 126. State Bank of N. B. v. First Nat. Bank, 377. Stearn.s «. Gage, 355. Stearns v. Tappin, 590. Stebbins v. Harmon, 338. Stebbins v. Sherman, 71. Stebbins v. Willson, 57. Stedman v. Davis, 315. Steel V. Goodwin, 372, 379, 382, 386. Stein V. Levy, 202, 203. Steinert, Matter of, 88. Sti-inhouser v. Mason. 461, 506. Steinle v. Bell, 36. Steinman v. Magnus, 591, 608. Stephens v. Buff, and N. Y. City R. U. Co., 168. Stephens v. Stein, 190, 495. Stephens v. Strong, 546. Stern v. Fisher, 194, 258. Stern v. Nussbaum, 71. Sternfeld v. Simonson, 316. Sterrett v. Third Nat. Bank, 3. Stevenson, Matter of, 163, 432, 508. Steward v. Cole, 448. Steward v. Green, 68. Stewart v. Ackley, 242. TABLE OF CASES CITED. XXXVll Stewart v. Ahvenfeldt, 590. Stewart v. English, 274. Stewart v. Isidor, 68. Stewart v. Killmar, 53. Stilwell V. Coope, 71. Stinemets v. Ainslie, 54, 189. Stirn V. McQuade, 63. Stockbridge, Matter of, 415, 578. Stoddard v. Butler, 441. Stoddard v. Harrington, 65. Stone V. Frost, 462. Stone V. Miller, 428. Storm V. Badger, 346. Storm V. Davenport, 176, 242, 255. Storm V. Waddell, 55, 346. Story V. Brown, 549. Stowell, Matter of, 565, 575. Strahlheim v. Wallacli, 433, 444. Straus, Matter of, C75. Strauss, Matter of. 407, 453. Streatfield v. Streatfield, 313, 523. Strickland v. Harger, 595. Strickland v. Laraway, 151. Strong V. Skinner, 172, 173, 250, .261. Strong V. White, 53. Struthers v. Holfstadt, 298. Stryker v. Cassidy, 200. Stuart V. Blum, 607, 608. Stuart V. Salhinger, 70. Stubbs, In re, 310, 352. Sturtevant v. Ballai-d, 338. Sturges -D. Crowlnshield, 5, 8, 10, 11, 13, 60, 61, 65, 66. Sullivan v. Miller, 353, 449, 555. Sullivan v. Smith, 144. Sullivan v. Warren, 301. Sun Mut. Ins. Co. v. Hubbell, 604. Sutherland, In re, 53. Sutherland v. Bradner, 173, 256, 362. Suydam v. Belknap, 96, 97, 100. Suydam v. Broadnax, 63. Swanson v. Tarkington, 522. Sweeny, Matter of, 556. Sweet V. Tinslar, 142. Sweetser v. Smith, 205, 208, 338, 339. Swezey, Matter of, 451, 453. Swift V. Hart, 349, 252, 253, 254, 833, 350, 351, 445. . Syracuse Chilled Plow Co. v. Wing, 215 Syracuse B. & N. Y. R. R. Co. v. Collins, 308, 309, 409. Tabor v. Van Tassell, 304, 305. Tabram v. Freeman, 32, 600. Taft V. Marsily, 181. Taf t V. Wright, 177, 446. Taggart v. Herrick, 151. Taggart v. Sisson, 151. Talcott V. Hess, 158, 368, 279, 285, 388, 398, 399, 303, 314, 401, 402, 403. Talcott V. Levy, 280, 296. Talcott V. Rosenthal, 283. Talcott V. Thomas, 314, 346. Talley v. Curtain, 369. Tannenbaum v. Rosswog, 332, 333. Tappendenii. Burgess, 116. Taylor u. Bolmer, 470. Taylor v. Williams, 28, 30, 74. Tebbs V. Carpenter, 490. Temple, In re, 309. Terry v. Butler, 156, 158, 161, 170, 288, 391,398,401,549. Terry v. Munger, 313. Thalheimer v. Klapetsky. 305. Thatcher v. Candee, 149, 43.', 433, 459, 508. Thayer, Sx parte, 53, 83, 87. Thelusson v. Smith, 4, 529. Therasson v. Peterson, 597. Third Nat. Bank v. Guenther, 214. Third Nat. Bank v. Hastings, 66. Third Nat. Banki). Lanahan, 533. Thomas. Matter of, 75, 76, 106, 557. Thomas v. Heathorn, 590. Thomas v. Pemberton, 440, 495. Thomas v. Striker, 57. Thompson, Matter of, 162. 301, 528. Thompsons. Brown, 489. Thompson «. Fry, 313, 314. Thompson v. Hooker, 464. Thompson v. Rainwater, 109. Thompson v. Thompson, 1. Thompson's Appeal, 179. Thomson v. MacGregor, 414. Thorn, Matter of, 564. Thrasher v. Bentley, 110, 308, 309, 409. Throop V. Hatch Lith. Co., 213. Throop G. C. Co. v. Smith, 320, 322. Thurberu. Blanck,320. Thurston v. Rosenfield, 370, 382, 386. Tiemeveri;. Turnquist, 111, 172. Tilson I). Terwilliger, 293, 307. Tim V. Smith, 234, 335, 283, 317. Titus V. Kent, 473. Tobias v. Rogers, 55, 56. Torakins, Matter of, 96. Tomlinson v. Smallwood, 499. Tompkins v. Hunter, 202. Tompkins v. First Nat. Bank, 203. Tompkins u. Wheeler, 115, 116, 269. Toof U.Martin, 1,2. Tooker v. Bennett, 56. Topping, Bx parte, 582. Tonejv. Bank of Orleans, 483. Town u.Bank of River Raisin, 125, 136. Townee. Smith, 63. Townley u. Sherborne, 501. Townsend, Matter of, 565. Townsend v. Newell, 606, 613. Townsend v. Stearns, 196, 236, 255, 256, 260, 274. XXXVlll TABLE OF CASES CITED. Townshend, Ex parte, 513. Towsley v. McDonald, 193. Tracy v. Talniage, 178. Tracy v. Tuffly, 146. Train v. Kendall, 372, 383. Travis v. Myers, 540, 541 . Travis v. Illingworth, 354. Treadwell v. Holloway, 54. Treadwell v. Sackett, 164. 165. Tremaine v. Mortimer, 446, 448, 450. Triers. Herman, 203. Trimble v. Woodhead, 446. Troy Waste Mfg. Co. u. Harrison, 130. Troy Waste Mfg. Co. v. Saxony Woolen Mills, 130. Truaxu.. Slater, 304,306. True, JIatier of, 330. Trueman v. Fenlon, 71. Tua V. Carriere, 10. Tuller, Matter of, 309. Tulley, In re, 556. Turner v. Beale, 69. Turner v. .Taycox, 156, 157, 229, 340. Turner v. Maule, 533. Turner w. Richardson, 440, 495. Turney v. Van Gelder, 290, 393, 397, 314, 336. Tutliill V. Skidmore, 3. Underhill, Matter of, 392, 430. Underwood, In re, 36. Underwood v. Stevens, 490, 499. Union Bank v. EUicott, 125. Union Bank v. Kansas City Bank, 301. Union Nat. Bank v. Gnetz, 179. Union Nat. Bank v. Warner, 349. U. 8. V. Bank of U. 8., 530. U, 8. V. Clark, .539, 530. U. S. V. Fisher, 530. U. S. V. Hafk, 530. U. S. V. Hooe, 529, 530. U. S. V. Rowland, 156, 529, 530. U. S. V. Hunter. 539, 531. U. S. V. Langton, 530. U. S. V. McLellan, 530. U. S. V. Mott, 581. U. S. V. Munroe, 530. U. S. Bank v. Huth, 161. U. S. Net & T. Co. V. Alexander, 377. Untermeyer v. Hutter, 2S5, 334. Utica Ins. Co. v. Lynch, 438, 490, 491, 498. Utica Ins. Co. v. Power, 346. Valkenburgh v. Dederick, 68. Van Allen v. Rooers, 337, 447. Van Alstyne v. Cook, 145, 333, 348. Van Bergen v. Lehmaier, 2T0, 375. Van Bokkelen v. Taylor, 593. Van Brunt ti. Applegate, 137, 141. Van Brunt u. Van Brunt, 601. Van Buskirk v. Warren, 113, 115, 178, 391, 293, 875, 387. Vance v. Phillips, 287. Vanderhevden v. Vanderheyden, 554, 556. Vanderpoel v. Gorman, 136, 131, 133, 366, 878, 883. Van Dine v. Willett, 183, 253, 364, 365, 440, 441. Van Dyck v. McQuade, 464. Van Epps u. Van Dusen, 188. Van Epps v. Van Epps, 483, 513. Van Gelder v. Van Gelder, 304. Van Heusen v. Radcliff, 173, 431, 422, 448. Van Hook v. Walton, 161. Van Hook v. Whitlock, 63, 65. Van Horn, In. re, 556. Van Nest v. Yoe, 263, 266, 267, 375, 291, 315. Van Noslrand v. Barr, 10. Van Riper v. Poppenhausen, 2. Van Rossum v. Walker, 237, 250, 258. Van Schoonhovon, Matter of, 432, 509. Van Slyke v. Bush, 414. 556. Van Slyke v. Shelden, 36. Van Valen v. Schermerliorn, 169. Van Valkenburgh v. Elmendorf, 459. Van Vechten v. Van Veghten, 241. Van Vleck v. Burroughs, 573. Van Vleet v. Slauson, 153, 899, 409. Van Wagoner v. Terpenning, 456. Van Wezel v. Van Wezel, 6, 88. Van Winkle v. Armstrong, 154, 363, 377. Van Wyck, Matter of, 508, 509. Van Wyck v. Read, 371, 389. Varnum v. Camp, 378. Varnum v. Hart, 311, 212. Vernon v. Morton, 154. Verplanok «. Van Buren, 357. Vidvard v. Powers. 306. Victor V. Henlein, 385, 287. Viettu- V. Levy, 270. Victor u. Nichols, 379, 387. Vilmar, Matter of, 573. Vine V. Mitchell, QpO. Von Glahn v. Varrenne, 63. Von Hein v. Elkus, 308, 407, 409, 410, 518. Von Sachs v. Kretz, 805, 306. Von Schoening, In re, 103. Vredeubergh v. White, 294. Vrooman v. King, 805. Wade V. Sewell, 68. Wadsworth, Matter of, 433, 508, 509, 513. Waggoner v. Walrath, 56. Wagner v. Hodge, 167. TABLE OF CASES CITED. XXXIX Wait V. Morris, 72. Waite V. Harper, 613. Waite, Matter of, 366, 368. Wakefield v. Fargo, 199. Wakeman v. Dalley, 238. Wakeman v. Grover, 125, 216, 238, 239, 243, 261, 262, 349, 354, 357. 459, 501, 542. Waldron v. McComb, 477, 479. Waldron v. Willard, 175, 178. Walkenshaw v. Perzel, 1, 2, 145. Walker, Matter of, 89, 310. Walker v. Barker, 533. Walker v. Seaborne, 605. Wall V. Thorn, 70. Wallace v. Berdell, 280, 395. Wallace v. Castle, 183, 184. Wallace v. Nodine, 293. Walsh V. Kelly, 222. Walters v. Whitlock, 365, 372, 377, 389. Walwyn v. Coutts, 363. Waples-Platter Co. v. Low, 398. Ward, Matter of, 5H, 528, 544, 568, 564, 566. Ward V. Morrison, 389. Ward V. Tingiey, 161, 347. Ward V. Webster, 181. Ward V. Van Bokkelen, 48. Warden v. Browning, 343. Warne v. Constant, 57. Warner v. Jaffray, 151, 166, 363, 366, 376, 400. Warner v Lake, 233. 379. Warner v. Wairen, 370. Warren v. Copelin, 389. Warren v. Fenn, 175, 431. Warren v. Warren Thread Co., 183. Warren v. Whitney, 614. Warren County v. Marcy, 345. Warrin's Cfise, 39. Warshauer v. Webb, 86. Warshing, In re, 556. Waterbury v. Sturtevant, 192, 193, 304. Waterbury v. Westervelt, 243, 269, 463. Waterford & W. Turnpike v. People, 895. Waterman v. Sprague Mfg. Co., 13, 535. Watson, Matter of, 96, 98, 430. Watson V. Bourne, 65. Waverly Nat. Bank u. Halsey, 368, 272, 282, 293, 480. Way V. Langley, 591, 613, Weaver v. White, 232. Webb V. Daggett, 146, 194, 195, 398, 301, 357. Webbu. Goldsmith, 591. Webb V. Thomas, 318, 354, 399, 402. Weber u. Mick, 201. Weed V. SmuU, 544. Weeks u. Buderus, 37. Welder v. Maddox, 365, 372, 382, 387. Weil V. McDonald, 190, 497. Weinlioltz, Matter of, 574. Welch V. Myers, 496. Weller v. Wayland, 198. Welles V. March, 188, 139, 140, 165, 276. Wells u. Evans, 594. Wells V. Knox, 542. Wells V. Maples, 183. Wells V. Munro, 814. Wells V. O'Connor, 306. Wells V. Stewart, 464. Welsh V. Welsh, 55. Wendell, Matter of, 61, 63. Wendell v. Keves, 166. West V. Bank of Rutland, 533. West w. Tupper, 377, 382, 387. Westervelt v. Gregg, 551. Westlake v. Bostwick, 464. Wetmore v. Hegeman, 505. Wetter v. Schlieper, 138. Whedbee v. Stewart, 243, 274. Wheeler v. Bramah, 495. Wheeler v. Emmeluth, 30, 58. Wheeler v. Lawson, 450. Wheeler v. Perry, 428. Wheelock v. Kost, 8. Wheelock v. Lee, 457. Whelan v. Whelan, 463. Whipple V. Thaver, 386. Whitcomb v. Fowle, 145, 281, 332, 337 361 862 White V. Benjamin, 308, 314, 370, 373, 379, 380, 385, 286, 302. White V. Bullock, 503. White V. Canfield, 66. White V. Carpenter, 347. White V. Coatsworth, 76. White V. Cotzhausen, 201, 203. White V. Fagan, 190, 349. White V. Kuntz, 590, 591, 607, 609. White's Bank ». Farthing, 333, 343. Whiteside «. Hyman, 601. Whitewright v. Stimpson. 146. Whiting V. Lebenheim, 399. Whitney v. Hirsch, 280. Whitney v. Krows, 257, 258, 264, 437. Whittaker v. Merrill, 174. Whittemore v. Obear, 596. Wiggin V. Bush, 608, 613. Wi^gin V. Gans, 548, 549, 558. Wiglesworth «. White, 605. Wilbur 1). Pradenburgh, 393, 443. Wilcox «. Payne, 205, 208, 269, 285. Wilder v. Fondey, 374. Wilder v. Keeler, 548. Wilder «. Winne, 193, 194, 373, 376. Wiley V. Hall, 433. Wilkens v. Warren, 52. xl TABLE OF CASES CITED. Wilkes V. Ferris, 156, 173, 194. Wilkins v. Batterman, 389. Wilkins v. Davis, 423. Wilkinson, Matter of, 452. Wilkinson v. Banerle, 125. Wilkinson v. Byers, 590, Wilkinson v. Paddock, 343, 344, 349. Willcox V. Smith, 349, 550, 553, 554. Willetts V. Vandenburgh, 827, 331. Williams v. Boyle, 178. Williams v. Brown, 193, 464. Williams v. Carrington, 592, 593, 606, 609. Williams v. Hadley, 228. Williams u. Otey, 113. Williams v. Pitts, 309. Williams v. Purdy, 551. Williams v. Whedon, 143, 325. Willink V. Ren wick, 461. Willis, Matter of, 498, 536. Willitts V. Waite. 366, 368. Willoughby v. Comstock, 133. Wilmerding v. McKesson, 499, 503. Willson V. Gomparts, 56. Wilmer v. White, 54. Wilsev V. Dennis, 169. Wilson, Matter of, 360. Wilson V. Berg, 276. Wilson V. Britton, 377. Wilson V. Carson, 378, 383. Wilson V. Ferguson, 195, 335, 283, 393 Wilson V. Forsvth, 171, 173, 368, 370, 271, 289, 294, 296, 331, 334. Wilson V. Joseph, 388. Wilson V. Robertson, 383, 323, 324, 237, 247, 356, 357, 359. Wilson V. Wilson, 560. Wilson Bros, W. & T. Co. v. Daggett, 314, 336. Wiltse, Matter of, 535, 565, 567, 568. WindmuUer v. Dodge, 333. Winn, Matter of, 453. Winn V. Crosby, 438, 458, 490, 493. Wintringham v. Lafoy, 194, 350. Wise V. Grant, 443. Wiswell V. First Congregational Ch., 437. Witmer, Matter of, 429. Witt V. Follett, 64, 74. Wolflf, Matter of, 549, 555, 558. Wood V. Bolard, 319, 311. Wood fl. Brown, 503, 509. Wood V. Morehouse, 35. Wood V. Roberts, 599. Wood V. White, 159. Woodburn v. Mosher, 336, 355. Woodhull V. Wagner, 11, 66. Woodruff V. Cook, 437. Woods V. Axton, 354. Woodward, Matter of, 534. Woodward v. Brooks, 384, 385. Woodworth v. Hodgson, 303, 394. Woodworth v. Seymour, 410. Woodworth v. Sweet, 193, 314. Wooster, Matter of, 470. Work V. Ellis, 357, 369, 274, 483. Workman «. Leake, 53. Worthington v. Jerome, 65. Worthington v. Pfister Book-Binding Co., 133. Worthley, Matter of, 557, 577. Worthy v. Benham, 409. Woven Tape Skirt Co., In re, 558. Wright V. Clapp, 430, 457. Wright V. Nostrand, 305, 307. Wright V. Paton, 66. Wright V. Ritterman, 77. Wrigley, Matter of, 16, 18. Wronkrow v. Killeen, 157. Wurlz V. Hart, 533. Wyatt V. Brooks, 339. Wyman v. Mitchell, 13, 57, 60, 61. Wynkoop v. Shardlow, 153, 559. Yates V. Lyon, 133. Yeager, Matter of, 565, 574. Yonkers & N. Y. Fire Ins. Co. v. Bishop, 76. Young V. Clapp, 301. Young V. Heermans, 159, 335. Young V. Hill, 538. Young V. Peyser, 190, 495. Youngs, Jn re, 436, 557. Zabriskie v. Smith, 174. Zeitz, In re, 98. Ziegenfuss, Hx parte, 11. Zinn V. Ritterman, 53. Zoebisch u.Von Minden, 601, 604, 614. Zuppann v. Bauer, 384, 385. INSOLVENT DEBTORS. CHAPTER I. INTRODUCTOKY. INSOLVENCY AND INSOLVENT LAWS. § I. Definitions. — Insolvency is the inability to pay one's debts. Inability to pay, however, is frequently qualified by cir- cnmstances of time and manner.' Hence the exigencies which will establish insolvency in one class of cases may fail to do so in another. The word consequently often varies in signification according to the several occasions of inquiring into it. Cowen, J., iu Herrick v. Borst, 4 Hill, 650, 654. As the term is used in insolvent and bankrupt laws, especially as applied to traders, it means tlie condition of a person unable to pay his debts as they fall due, in the usual course of trade or business. Ellen- borough, 0. J., in Bayly v. Schofield, 1 M. & S. 338, 350 ; Field, J., in Toof 'v. Martin, 13 Wall. 40 ; Buchanan v. Smith, 16 Wall. 277 ; In re Randall & Sunderland, 3 N. B. R. 18 ; Brouwer v. Harbeoh, 9 N. Y. 589 ; Thompson v. Thompson, 4 Gush. (Mass.) 127 ; Lee v. Kilhurn, 3 Gray (Mass.), 594 ; 2 Bell's Com. 162. In this restricted sense a person may be in- solvent although he may be able to pay all his debts at some future time, upon a settlement and winding-up of his affairs. Thompson v. Tliompson, 4 Cush. (Mass.) 127 ; Ferry v. Bank ' " It is true that 'insolvency ' and ' inability to pay ' are synonymous, but solvency does not mean ability to pay at all times, under all circum- stances, and everywhere on demand, nor does it require that a person should have in his possession the amount of money necessary to pay all claims against him." Bobertson, Cn. J., in Walkenshaw v. Perzel, 4 Robt. 426, 433 ; s. c. 33 How. Pr. 283. A collection of cases bearing on the definition of insolvency will be found in note to First Nat. Bank v. Walton, 5 L. R. A. 765. 1 2 INTRODUCTORY. [CH. I. of Cent, ^^ew Yor\ 15 How. Pr. 4i5 ; Bell v. Ellis, 33 Cal. 620. In its popular and general sense insolvency is used to de- note the insufiSciency of the entire property and assets of an in- dividual to pay his debts.' Toqf v. Jlartra, 13 Wall. 40 ; Van Jiiper v. Poppenhcmsen, 43 N. Y. 68, Y5 ; Curtis v. Leavitt, 15 N. Y. 9, 141 ; Walkenshaw v. Perzel, 4 Eobt. 426 ; s. o. 32 How. Pr. 233 ; Churchill v. Wells, 7 Cold. (Tenn.) 364. And it is in this sense that the word seems to have been used in the statute of this State (1 R. S. 591, § 9, Repealed L. 1S82, c. 402), prohibiting assignments and conveyances by cor- poration when insolvent or in contemplation of insolvency, with intent to give a preference. Curtis v. Leavitt, supra, 138, 139 ; see Diitcher v. Importers'' & Traders' J\^at. £ank, 59 N. Y, 5 ; Paulding v. Chrotne Steel Co. 9i N.Y. 334. What constitutes insolvency and what proof is sufficient to establish the fact are questions of importance in a variety of actions,' in which the rights of individual creditors are concerned. ' In the case of Queen v. Saddlers' Co. (10 H. L. Cas. 404), much discussion was liad upon the signification of the term insolvency. In that case a char- tered company had enacted a by-law which provided " that no person who has become a banlirupt, or otherwise insolvent, shall hereafter be admitted a member of the court of assistants of this company." The relator was elected a member of that court, but was at the time not possessed of sufficient means to pay his liabilities, although continuing business without default. A short time after he was declared bankrupt. The judges were nearly equally divided in opinion as to whether the relator was to be regarded as insolvent within the meaning of the by-law at the date of his election. The Lords, however, were of the opinion that the by-law pointed to some overt act of insolvency, such as taking the benefit of the insolvent law, or stopping pay- ment, or compounding. ^ Thus, a surety who has requested the creditor to sue the principal at a time when he was solvent may be discharged on proof that the principal has subsequently become insolvent. In such a case insolvency is said to mean that the debtor is in such a condition that the demand cannot be collected out of his property by due process of law (Nelson, J., in Huffman v. Hulbert, 13 Wend. 377), though Cowen, J., in Hernck v. Borst (4 Hill, 650, 657), thought the test should be whether the debtor was able to pay his debts ac- cording to the ordinary usage of trade. See Marsh v. Dunckel, 25 Hun, 167. A vendor can only exercise the right of stoppage in transitu against an in- solvent or bankrupt buyer, and, in that connection, by insolvency is meant a general inability to pay one's debts, and of this inability to pay one just and admitted debt would probably be sufficient evidence. Benjamin on Sales (Bennett's Ed.), § 837, and cases cited. So a vendor in possession of property on § l.J DEFINITION OF INSOLVENCY. 3 But these are instances of what may be termed simple insolvency as distinguished from notorious or legal insolvency.' Such notorious or legal insolvency, which is the principal topic of the present treatise, is the situation of a person who has done some notorious act to divest himself of all his property, as mak- ing an assignment," or applying for relief, or having been pro- ceeded against in, invitum under bankrupt or insolvent laws. the insolvency of the vendee may exercise his right to retain the goods as secu- rity for the price, and in that case the fact that the vendee's commercial paper has been dishonored, and his property taken under attachment in an action in which judgment is subsequently recovered by default if unexplained, is proof of insolvency. Tuthill v. Bkidmore, 134 N. Y. 148. So in cases where a creditor is permitted to proceed against the estate of deceased partner, upon proof of the insolvency of the survivors, the inability to collect the debt against the survivors by process of law, as evidenced by the return of an exe- cution unsatisfied, will lay the foundation for such an action, although the survivor may have had property out of which the execution might have been satisfied, which was not discovered by the sheriff. Pope v. Cole, 55 N. Y. 124 ; see WJieeloelc v. Kost, 77 111. 296 ; Hope Mutual Im. Uo. v. Perkins, 2 Abb. Dec, 883. The nonpayment of a check drawn by a commercial house upon its bankers is evidence of insolvency. Brown v. Montgomery, 20 N. Y. 287. In Sterrett v. Third Nat. Bank, 53 Supm. Ct. (46 Hun), 33, where the question litigated was whether one of the members of a firm had an attach- able interest in the firm assets, and this was conceded to depend upon the solvency of the firm at the time of the attachment, it appeared that the firm assets consisted largely of oil certificates, which were hypothecated to pay the firm debts, and which fluctuated in value from day to day. Upon the day of the attachment the market value of the oil certificates was sufiicient to have furnished a small surplus, but subsequently would have been insuf- ficient. The court, Bradley, J., said (p. 37) : " When the property is of such character that it has constantly a fluctuating market price, the financial con- dition of the firm owning it is not necessarily established by the fact that the price for an hour or a day would produce an excess of its liabilities, so as to furnish an interest in the individual partners and subject the firm property to the process of their respective creditors, especially if it is so situated that the firm cannot make such transitory market available, because the interest of the partners severally is only in the surplus which may remain after the winding-up its business and the payment of the partnership debts, and is dependent upon the result, which requires an opportunity to do it." 1 The fact of insolvency is often important upon the question of fraudulent intent. In such cases the character of the debtor's business is an element to be taken into consideration. The evidence which would justify a finding of insolvency in the case of a banker or merchant might be insuflacient in the case of a farmer. First Nat. Bank v. Walton, 5 L. R. A. 765, and see cases collected in note. "^ Gunningham v. Norton, 135 U. S. 77. 4 INTRODUCTORY. [CH. I. This is the sense of the word as employed in the statutes of the United States, giving a priority to the United States in cases of insolvency. R. S. U. S. § 3466 ; Pi-ince v. Bartlett, 8 Cranch, 4:31 ; s. c: sub. nom. Bartlet v. Prince, 9 Mass. 431 ; Thelus- son V. Smith, 2 Wheat. 396. And such acts are, as against the debtor, conclusive evidence of insolvency. Morewood v. Eol- Lister, 6 N. Y. 309. § 2. Bankruptcy and insolvency distinguished.— Using the words now as indicating a legal status, bankruptcy is the position in which a man becomes placed when he has committed an act of bankruptcy and is thereupon adjudged a bankrupt ; insol- vency is a man's position when he becomes subject to the laws relating to insolvents, and is brought within the jurisdiction of the insolvent laws. Cockburn, Ld. Ch. J., in Queen v. Sad- dlers'' Co. 10 H. L. Gas. 404, 453. This brings into distinction two systems of laws which were formerly much more widely dis- tinguished than at present. The English bankruptcy system, as established by the earlier statutes, applied to traders only ; it did not provide any method by which a debtor could voluntarily bring himself within the operation of the bankrupt laws, nor did it discharge the bankrupt from his debts. Down to 4 and 5 Anne, the bankrupt continued liable for his debts, and the divi- dends under tlie commission were only considered a payment pro tanto. Kent, Ch. J., in Murray v. De Rottenham, 6 Johns. Ch. 53, 64. But the benefits of a discharge were available only to traders, and to such traders only as were proceeded against vn invitum. There remained, therefore, a large class of insolvent debtors liable, so long as imprisonment for debt was an ordinary rem- edy, not only to be stripped of their property, but also to be deprived of their liberty, without relief from the bankrupt law or from any other source. ' It was to meet the necessities of this ' " If a man be taken in execution, and lie in prison for debt, neither the plaintiff, at whose suit he is arrested, nor the sheriff who took him, is bound to find him meat, drink, or clothes ; but he must live on his own, or on the charity of others ; and if no man will relieve him, let him die in the name of God, says the law ; and so say I." Hyde, Justice, in Manby v. Scott, 1 Mod. 32 (A.D. 1663). § 3.] ENGLISH INSOLVENT LEGISLATION. 5 class of debtors that insolvent laws were first enacted, and the relief afforded consisted not in discharging the insolvent from his debts, but simply in exonerating his person from imprison- ment. These laws resembled bankrupt laws only in so far as they both contemplated an equal division of the debtor's present efiEects among his creditors ^?'o rata. As we shall presently see, the English insolvent laws were gradually extended to include the discharge of the debtor from his debts as well as from im- prisonment, while the bankruptcy laws were also extended to include all classes of debtors, and thus the two systems were brought into assimilation. In this country the term bankrupt law has been, for the most part, confined to such enactments as have been made by Con- gress, under its constitutional power to establish uniform laws upon the subject of bankruptcies throughout the United States, while the laws passed by the various States, whether properly insolvent or bankrupt laws, have been designated as insolvent laws. "No distinction," says Justice Story, "was ever prac- tically or even theoretically attempted to be made between bank- ruptcies and insolvencies, and a historical review of the colonial and State legislation will abundantly show that a bankrupt law may contain those regulations which are generally found in in- solvent laws, and that an insolvent law may contain those which are common to bankrupt laws. Story on Cons. § 1111. See Ch. J. Marshall, in Sturges v. Orowninshield, 4 Wheat. 122, 195. § 3. English insolvent legislation.— The first English act for the relief of insolvent debtors was enacted in 1670 (22 & 23 Chas. II, c. 20). Bronson, J., in Sackett v. Andross, 5 Hill, 327, 349. This act was confined to such debtors as were in prison upon a day specified in the act. The debtor was dis- charged from imprisonment, but the debt could still be enforced against his property, and the creditor might, if he chose, still retain him in custody by paying a small stipend for his support. This act was followed by many others of a similar character, passed for the purpose of relieving the crowded condition of the jails, and at such intervals as the caprice of parliament dictated.' ' Among them are the following : fi Geo. I, c. 32 ; 11 Geo. I, c. 31 ; 3 Geo 6 INTEODTTCTORY. [CH. I. At the time of our revolution it is said that there were not less than thirty British statutes on the subject. Bronson, J., in Sackett v. Andross, 5 Hill, 327, 3i9. In 1697 the experiment appears to have been tried of discharg- ing the debtor by means of a composition upon consent of two- thirds in number and value of his creditors (8 & 9 Wm. Ill, c. 18), but the result seems to have been unsatisfactory, and the act was repealed the next year (9 & 10 Wm. Ill, c. 29). The first general and permanent statute was that of 32 Geo. II, c. 28, commonly called the Lord's Act, from the circum- stance of its having originated in the House of Lords. Kelief was limited to prisoners actually in custody upon executions for debts under £100 (afterward extended to £200, 33 Geo. Ill, c. 5). It was upon this act that our statute for the relief of debt- ors, with respect to the imprisonment of their persons, was mod- elled. McCoun, Y. C, in Van Wesel v. Van Wezel, 3 Paige, 37, 41. In all insolvent acts, down to 1774, a power was given to take in execution for any former debt the future effects of the insol- vent, but this clause was omitted in 14, 16 & 18 Geo. Ill, where it was provided, that only real estate or money in the funds ac- quired after such discharge should be liable for former debts. Mason v. Vere, 2 Wm. Bl. 1310, Blackstone, J. In 1813 (53 Geo. Ill, c. 102), " The Court for Relief of Insolvent Debt- ors," was originally constituted, and a general system was pro- vided for the discharge of all imprisoned debtors who had been in actual custody for three months, upon a full surrender of their property, and the court for the relief of insolvent debtors was established. Under this act a contingent discharge was granted as to the insolvent's debts. The court was authorized to enter up a judgment against the insolvent in favor of all his creditors, and that judgment could be enforced on application to the court, showing that the debtor had subsequently become 11, c. 30 ; 3 Id. c. 22 ; 3 Id. c. 37 ; 10 Id. c. 36 ; 11 Id. c. 9 ; 16 Id. c. 17 ; 21 Id. c. 31 ; 38 Id. c. 13 ; 39 Id. c. 18 ; 1 Geo. Ill, c. 17 ; 3 Id. c. 2 ; 5 Id. c. 41 ; 9 Id. c. 36 ; 14 Id. c. 77 ; 18 Id. c. 53 ; 21 Id. c. 63 ; 41 Id. c. 70 ; 44 Id. c. 108 ; 45 Id. c. 3 ; 46 Id. c. 108 ; 51 Id. c. 125 ; 53 Id. c. 103 ; 1 Geo. IV, c. 119 ; 7 Id. c. 57 ; 11 Geo. IV & 1 Wm. IV, c. 38. § 4.] INSOLVENT LEGISLATION. 7 able to pay ; the object being not only to obtain an equal dis- tribution of the debtor's present estate, but also of his future acquisitions. Baker v. Sydee, 7 Taunt. 179 ; see Carpenter v. White, 3 J. B. Moore, 231. In the year 1826, the various pre- existing acts were abolished, and a new statute, 7 Geo. IV, c. 57, became law. This act consolidated the provisions of previous acts, and added others. In 1838 (1 & 2 Vict. c. 110), arrest upon mesne process for debts exceeding £20 was abolished, ex- cept in cases where proof was made of the intention of the de- fendant to leave England. Provision was also made for dis- charge from liability to imprisonment on final process upon the surrender by the debtor of all his property. By subsequent statutes (5 & 6 Vict. c. 116 ; 7 & 8 Vict. c. 96), this legislation was still farther extended. In 1861 (24 & 25 Vict. c. 134), the court for the relief of insolvent debtors was abolished ; the banlj- rupt law was extended to non-traders as well as traders, and the original distinction between the insolvent and bankrupt systems became substantially obliterated. § 4. Insolvent legislation in the State of New York.— Ex- cept for a brief interval (from 1770 to 1784), insolvent acts have uniformly existed in the State of >J'ew York ever since it was an independent government. Mather v. Bush, 16 Johns. 233, 234. These acts have been both bankrupt and insolvent laws. They have discharged the debtor from his debts, and have also relieved his person from imprisonment. A general act for the relief of insolvent debtors, permitting the debtor, in conjunction with three-fourths of his creditors, to petition for his discharge from his debts, existed in the colony of New York, from 1761 to 1770. Livingston & Smith's Ed. of Laws, vol. II, pp. 62, 216 ; Van Schaick's Ed. vol. I, pp. 348, 392 ; Jones & Variek's Ed. vol. I, p. 131 ; Id. vol. II. p. 408. A similar act was passed by the State Legislature in April, 1784, which was at various times amended, and on March 21, 1788 (2 Greenl. 204), was passed the act commonly called the three-fourths act, which was revised April 3, 1801 (1 K. & K. 428), and continued in force until the act of April 3, 1811 (6 Web. & Sk.200), by which a debtor was discharged from his debts on his own petition merely, and on the surrender of his prop- 8 INTRODUCTORY. [CH. I. erty without the concurrence or consent of any of his creditors.' This act did not continue for a year, but was repealed by the act of February 14, 1812 (6 Web. & Sk. 31:9), and the act of 1801 thereupon revived and continued in force until the revision of the laws in 1813, when the act of April 12, 1813 (1 K. L. 460), was passed, allowing an insolvent debtor, in conjunction with two- thirds of his creditors, to petition for a discharge. This act was amended from time to time, and by the act of February 28, 1817 (Laws of 1817, c. 55), provisions were inserted for proceedings by creditors to compel assignments by debtors imprisoned on execution. This act was fully revised and incorporated into the Eevised Statutes of 1830 ; that portion of it relating to the dis- charge of a debtor on his petition, in conjunction with two-thirds in amount of his creditors, forming the third article of chapter six, of title one, of part two, and the portion relating to com- pulsory proceedings on the part of creditors, forming the fourth article of the same chapter. Each of these articles has now been repealed. The provisions relating to the discharge of an insolvent from his debts, have been incorporated into the Code of Civil Procedure, under article first, of title one, of chapter xvii. This article is considered in detail hereafter. The provisions relating to proceedings to com- pel assignments by debtors imprisoned on execution, have not been revived. The other class of statutes, more strictly denominated insol- vent laws, which furnished relief to debtors with respect to the imprisonment of their persons, have also existed in this State from an early time. The act of February 13, 1789 (2 Greenl. ' It was this act which was declared unconstitutional as to debts contracted before its passage in the famous case of Sturges v. CrowniriaJiield (4 Wheat. 122). Of this act Chan. Kent says {Hicks v. Hotchkiss, 1 Johns. Ch. 297, 304) : " There never was a law that held out more alluring and more dangerous temptations to debtors to forget what they owed to good faith, and to disre- gard the moral obligation of contracts. Its effects upon the community were rapid and deplorable. The evils of it were contagious, and spread like a pes- tilence. The public became alarmed, and wise and good men, and men of property, were deeply excited. Petitions for the repeal of the act flowed in from every quarter to the next Legislature, and it was one of the first acts of the session of 1812 (Sess. 35, c. 8) to abolish the law of the preceding year, without waiting to prepare another and better system in its stead." § 5.] COJSrSTITUTIONALITY OF INSOLVENT LAWS. 9 231), as amended March 10, 1791 (2 Greenl. 355), usually called the £1,000 Act, was framed upon the basis of the English statute of 32 Geo. II, c. 28. It provided a system for the discharge of debtors imprisoned on execution for an amount not exceeding £1,000, npoa their executing an assignment of their property for the benefit of the creditors who have charged them in execution. This act remained in force until the revision of 1813, when the act of April 9, 1813 (1 Laws of 1813, c. 81), was passed. By this act debtors charged in execution for a sum less thaii $500, and such as were held on execution for an amount exceeding that sum, who had been imprisoned for three months, became entitled to a discharge upon terms similar to those prescribed in the pre- vious act. In 1819 (Laws of 1819, c. 101), was passed what was entitled " An Act to abolish imprisonment for debt in certain cases." That act provided for the exoneration of insolvent debtors from arrest or imprisonment on debts arising ex coni/ractu, upon a sur- render of all their property for the benefit of all their creditors. The Revised Statutes retained the substance of each of these enactments. The act of 1819 was incorporated in the provisions of article five, of title one, of chapter five, of part two, provid- ing for voluntary assignments by an insolvent, for the purpose of exonerating his person from imprisonment ; while the sixth article of the same title contained the substantial requirements of the act of April 9, 1813, and provided for voluntary assign- ments by a debtor imprisoned in execution in civil causes. Each of these articles has been repealed and substantially re- enacted by the Code of Civil Procedure. The provisions for exoneration from arrest, comprise article second, of title one, of chapter xvii, and the provision for the discharge of an impris- oned judgment-debtor from imprisonment, constitute article third of the same title. Each of these articles form a portion of the subject-matter of the present work. § 5. The right of the State to legislate on the subject of bankruptcy and insolvency. — The Constitution of the United States provides that Congress shall have power to establish uni- form laws upon the subject of bankruptcies throughout the United States. It was contended for the first time, in the case 10 INTKODUCTORY. [CH. I. of Sturges v. Crowninshield (i Wheat. 122 [a.d. 1819]), that this grant of power to Congress was exclusive, and that no State had authority to pass a bankrupt law. This position was not sustained ; on the contrary, the law was declared to be (p. 208) " that, since the adoption of the Constitution of the United States, a State has authority to pass a bankrupt law, provided such law does not impair the obligation of contracts, within the meaning of the Constitution, and provided there be no act of Congress in force to establish a uniform system of bankruptcy, conflicting with such law." And this position has ever since remained unques- tioned. Ogden v. Saunders, 12 Wheat. 213 ; Boyle v. Zach- arie, 6 Pet. 635 ; Cooley's Cons. Lira. p. 294 (6th ed. p. 356). Some conflict of opinion has existed as to the extent and limit of the proviso to the rule, when Congress has exercised its con- stitutional power and established a bankrupt law. This question came before Mr. Justice Story, in Ex parte Eames (2 Story, 322), after the passage of the bankrupt act of 1841, and he there held that the insolvent laws of a State, as to persons and cases within the provisions of the bankrupt act, were completely sus- pended. In that case, however, the insolvent had filed his peti- tion in bankruptcy. Griswold v. Pratt (9 Mete. [Mass.] 16) went further. It was there held that when a United States bankrupt act was in force, if the debtor and his property were subject to the operation of that act, proceedings against him under the State insolvent laws were unauthorized and void, and that the actual institution of proceedings in bankruptcy was not necessary to produce that result. And this opinion is supported by abundant authority. Tua v. Garriere, 117 U. S. 201 ; In re Reynolds, 9 N. B. R. 50 : S. C. 8 R. I. 485 ; Shears v. Sol- hinger, 10 Abb. Pr. N. S. 287 ; Blanchard v. Russell, 13 Mass. 1 ; Day v. Bardvjell, 97 Mass. 246 ; Loihrop v. High- landj Foundry Co., 128 Id. 120 ; Van Nostrand, v. Barr, 2 N. B. R. 485 ; Larrahee v. Talhott, 5 Gill (Md.), 426 ; Chamberlain v. Perliins, 51 N. II. 336 ; Rowe v. Rage, 54 Id. 190, 194. In MeeUns v. Creditors (19 La. Ann. 497), it is stated broadly that the legal efl^ect of the exercise by Congress of the power vested in it by the Constitution is to repeal the in- solvent laws of each particular State. In opposition to these views, it has been declared by the courts § 6.] CONSTITUTIONALITY OF INSOLVENT LAWS. 11 of several of the States that the effect of the enactment of a Federal bankrupt law is not to annul or to wholly suspend the insolvent laws of the several States, but to limit their operation to such cases as were not actually brought within the operation of the National act. Reed v. Taylor, 32 Iowa, 209 ; Qeery's Appeal, 43 Conn. 289 ; JEx parte Ziegenfuss, 2 Ired. L. (N. C.) 463 ; Shryock v. Bashore, 13 N. B. H. 481 ; Shepardson' s Appeal, 36 Conn. 23 ; Hawkins' Appeal, 34 Conn., 548 ; Bech V. Parker, 65 Peun. St. 262 ; Barber v. Rodgers, 71 Penn. St. 362 ; see Boese v. Kirig, 108 U. S. 379, s. c. 78 N. Y. 471 ; rev'g s. c. 17 Hun, 270. The conflict of opinion, however, extends only to such State insolvent laws as discharge the debt, and are therefore strictly bankrupt laws. Laws which relieve the debtor from impris- onment merely, leaving the creditor at liberty to pursue his property, are not inconsistent with the exercise by Congress of its constitutional authority over the subject of banKruptcies. Sturges v. Crowninshield, 4 Wheat. 122 ; Mason v. Haile, 12 Id. 370 ; In re Jacobs, 12 Abb. Pr. IST. S. 273 ; Shears v. Sol- Mnger, 10 Id. 287 ; Donnelly v. Corbett, 7 N. Y. 500 ; Wood- hull V. Wagner, Bald. 296. § 6. When State insolvent laws impair the obligation of the contract. — A further objection has been taken to the enact- ment of State insolvent laws, upon the ground that such laws impair the obligation of contracts, and are, consequently, repug- nant to that provision of the Constitution of the United States which prohibits a State from passing such laws. This question was elaborately argued in the Supreme Court of the United States, in Sturges v. Crowninshield (4 Wheat. 122), and in Ogden v. Saunders (12 Wheat. 213). The decision of that court, which has ever since been regarded as final, was, that such laws were valid as to contracts made subsequently to the enact- ment of the law, because, being made after the law, the parties were presumed to have had reference to the law, and impliedly to have made it part of the contract ; but as to contracts entered into before the passage of the act, a discharge under a State in- solvent law was wholly inoperative. Whatever may be said of the grounds upon which the decision was placed (see remarks of 12 INTRODUCTOEY. [CH. I. Gardner, J., in Donnelly v. Corbett, 7 N. Y. 500, 505 ; and see Olyphaiit v. Atvjood, 4 Bosw. 459, 470 ; In re Rehnan o& Friedlander, 11 IST. B. R. 21), the rule is now so well settled as to be beyond question. Sturges v. Crowninshield, supra ; Ogden v. Saunders, supra ; Cook v. Moffat, 5 Ilosv. 295, 309 ; ^oyle V. Zacharie, 6 Pet. 34S ; Wyman v. 2Rtchell, 1 Cow. 316, 321 ; Mather v. Bush, 16 Johns. 233 ; Roosevelt v. Cebra, 17 Id. 108 ; Baldwin v. Hale, 1 Wall. 223 ; Oilman v. Loch- wood, 4 Wall. 409 ; Pratt v. Chase, 44 N. Y. 597. The consideration of the extent and qualifications of the gen- eral rule here stated will be reserved for discussion when we shall consider the effect of the insolvent's discharge. (See Chap. IV.) Insolvent laws which merely release the debtor from imprison- ment or from liability to arrest, affect the remedy only, and are open to no constitutional objection. " Imprisonment is no part of the contract, and simply to release the prisoner does not im- pair its obligation." Sturges v. Crowninshield, 4 Wheat. 122, 200. And it is quite immaterial whether the debt was contracted before or after the law was passed. Mason v. Haile, 12 Wheat. 370 ; Beej^s v. Haughton, 9 Pet. 329 ; In re Jacols, 12 Abb. Pr. N. S. 273. § 7. General assignments for creditors. — Apart from the statutory proceedings which have been mentioned, by which a debtor may seek relief from tiie burden of his debts, or free himself from the extreme enforcement of them against his per- son, tlie common law permits a failing debtor to place his prop- erty beyond the direct pursuit of creditors by a conveyance of it to an assignee in trust for his creditors. Such conveyance may be made to furnish a speedy and economical method for the distribution of a debtor's estate among those who are justly entitled to it. They do not, however, afford any direct relief to the debtor. The dividends paid to creditors amount only to a payment pro tanto, and the debtor is still liable to legal process as before. Butler v. Thompson, 4 Abb. N. C. 290 ; Water- man V. Sprague Mfg. Co. 14 R. I. 43. Under the well estab- lished rules of common law they do, however, famish a method by which an insolvent debtor may make payment of such debts § 8.] DIVISION OF THE SUBJECT. 13 as he may choose to prefer, to the exclusion of those who might otherwise obtain a priority (see Chap. XI, Preferences). They afford an opportunity also for creditors, if they are so disposed, to make an amicable settlement with their debtor, while his property is protected from seizure by any indiv^idual creditor. Beyond these advantages an honest general assignment can work no benefit to a debtor. Under the insolvent laws, as we shall see, the debtor's prop- erty remains in him until after an assignment is ordered. The preliminaries to obtaining such an order, if the requisite number of creditors is obtained, may necessarily occupy so long a time that, before the property is divested from the debtor, diligent creditors may have exhausted the estate. A failing debtor, therefore, who desires an equal distribution of his estate among his creditors, has, in the absence of a Na- tional bankrupt law, as a general rule, no choice but to execute a general assignment, and such conveyances have been the usual resort of failing debtors in this State for many years. The method of making such assignments and of administering the trusts created by them was first regulated by statute in 1860 (Laws of 1860, c. 3i8). That act was several times amended, and finally repealed and replaced by the general assignment act of 1877 (Laws of 1877, c. 466, amended by Laws of 1878, c. 318 ; Laws of 1884, c. 328 ; Laws of 1885, c 380 ; Id. c. 464 ; Laws of 1886, c. 283 ; Laws of 1887, c. 503 ; Laws of 1888, c. 294). Both the statute and common law relating to these in- struments, and the rights and duties created bj them, are dis- cussed in the following pages. § 8. Division of the subject. — The subject of the present work is divided in the following manner : Part I treats of the proceedings for the discharge of an insolvent from his debts, commonly called the " Two-thirds Act," being article one, of title one, of chapter xvii, of the Code of Civil Procedure. Part II presents the proceedings for exemption from arrest or dis- charge from imprisonment of an insolvent debtor, and also the proceedings for discharge of an imprisoned judgment-debtor from imprisonment, commonly known as the Fourteen Days Act, being articles second and third of the same title. Part III 14 INTRODUCTORY. [cH. I. treats of the execution and validity of general assignments and the provisions of the general assignment law of 1877. Part IV deals with the administration of the insolvent's estate, assigned under either of the previous proceedings. This includes a con- sideration of the provisions of article eight, of title one, of chap- ter five, of part two, of the Revised Statutes which remains un- repealed. Part V discusses the rules of common law in refer- ence to composition deeds and compositions between a debtor and his creditors, and releases by creditors. PART I. DISCHAEGE OF AN INSOLVENT FROM HIS DEBTS. ARTICLE FIRST, TITLE I, CHAPTER XVII, CODE OF CIYIL PROCEDURE. "THE TWO-THIRDS AOT.^' CHAPTEE II. COMMENCEMENT OF PROCEEDINGS. — PETITION. — SCHEDULE AND AFFIDAVITS. § 9, In general. — All the sections of this article apply to pro- ceedings commenced on or after the first day of September, 1880. (§3347, subd. 11, Code of Civ. Pro.) Sections 2181 to 2187, both inclusive, apply also to a case where a discharge is thereafter granted. (§ 3347, subd. 11, Code of Civ. Pro.) The proceeding is a special proceeding instituted without writ. It originates in a petition and terminates in an order. The judicial authority to entertain this class of proceedings is conferred upon tlie county courts, and in the city of New York upon the Court of Common Pleas, and the jurisdiction which these courts ac- quire is a special and limited jurisdiction determined by the statute. Hence the general rule which commands that a special authority conferred by statute must be strictly pursued, is ap- plicable at every stage of the proceeding. If the court acts with- out authority, or in excess of its power, its acts are void. It, cannot acquire jurisdiction by deciding that it has it. When the right to act depends upon the existence of a prescribed fact, the 16 THE TWO-THIEDS ACT. [cH. II. fact must exist or the power is wanting. Morrow v. Freeman, 61 N. Y. 515 ; Nat. Bh. of Chemung v. City of Elmira, 53 N. Y. 49, 53 ; People v. Stryher, 24 Barb. 649 ; Merry v. Sioeet, 43 Barb. 475 ; s. c. as Hale v. Sweet, 40 N. Y. 97 ; Stanton v. EUis, 12 IST. Y. 575. Want of jurisdiction, if it exists, is a radical defect. It is available at all times and in all places, either in the proceeding itself, or in any collateral proceeding. Small v. Wheaton, 2 Abb. Pr. 175, 178. As a rule of construction, it is said by Chan. Walworth {Salters v. Tobias, 3 Paige, 338, 345), that statutes of this de- scription, which are intended to deprive the creditor of all rem- edy for the recovery of an honest debt, must be construed strictly, and should not be extended by implication beyond the fair and legitimate meaning of the terms used by the Legislature. § 10. Who may be discharged.— (Code C. P. § 2149.) An insolvent debtor, who is a resident of the State at the time of presenting his petition, may be discharged from his debts, as prescribed in this article. This section does not in effect vary the law as it stood before. See 2 R. S. 16, § 1 ; 3 E. S. 6th ed. 13, § 1 ; 2 Edm. St. 17, and 2 R. S. 35, § 2 ; 3 R. S. 6th ed. 28, § 2 ; 2 Edm. 36. A for- eigner who has abandoned his residence in this State and re- moved to his home, cannot, by a return of a temporary character merely, acquire the right to a discharge under this article. Mat- ter of Wriffley, 4 Wend. 602 ; affi'd, 8 Id. 134. The residence intended by the statute does not, however, require that a person should have a legal domicile in the State. It is enough if he have a fixed and permanent abode here, as distinguished from a mere temporary locality of existence. Matter of Wrigley, supra ; see Roosevelt v. Kellogg, 20 Johns. 208, 210. The fact of residence is one that must exist, and be shown in order to confer jurisdiction. Otis v. Hitchooeh, 6 Wend. 433 ; Jenhs V. Stehhiiis, 11 Johns. 224 ; People ex rel. Pacific Mut. Ins. Co. V. Machado, 16 Abb. Pr. 460 ; Moi^ewood v. HolUs- ter, 6 N. Y. 309, 316. §,§ 11, 12.] PETITION. 17 § II. To what court application to be made.— (Code C. P. § 2150.) Application for such a discharge must be made, by the petition of the insolvent, addressed to the county court of the county in which he resides ; or, if he resides in the city of New York, to the Court of Common Pleas for that city and county. This sectioa is new. Formerly the proceedings were had be- fore certain specified officers. 2 R. S. 17, § 6 ; 3 R. S. 6th ed. 14, § 9 ; 2 Edm. St. 18, and 2 R. S. 34, § 1 ; 3 R. S. 6th ed. 28, § 1 ; 2 Edm. St. 35. Under the sections of the Revised Statutes the application might formerly be made anywhere throughout the State to a judge of the Supreme Court, or to a county judge. In the city of New York the application might also be made to one of the justices of the Superior Court (Laws of 1847, c. 255, p. 281, § 7 Eenard v. Bargous, 13 N. Y. 259 ; Laws of 1873, c. 239, § 1) or of the Court of Common Pleas (Laws of 1847, c. 255, § 7 Code of Civ. Pro. § 286) ; or to the city judge {Avery's Case, 6 Abb. Pr. 144) or recorder. In the city of Buffalo applications might also be made to the judges of the Superior Court of that city. Laws of 1854, c. 96, § 25, as amended by Laws of 1857, c. 361, § 6 ; see Code of Civ. Pro. § 293. In the city of Brook- lyn to the judges of the City Court of that city (Laws of 1873, c. 239, § 1) ; and in the city of Schenectady to the mayor. 2 R. S. 34, § 1. The proceeding is now had before the court. § 12. Contents of Petition.— (Code C. P. § 3151.) The peti- tion must be in writing; it must be signed by the in- solvent, and specify his residence; it must set forth, in substance, that he is unable to pay all his debts in full ; that he is willing to assign his property for the benefit of all his creditors, and, in all other respects, to comply with the provisions of this article, for the purpose of being discharged from his debts; and it must pray that, upon his so doing, he may be discharged accordingly. 2 18 THE TWO-THIEDS ACT. [cH. II. It must be verined by the affidavit of the insolvent, annexed thereto, taken on the day of the presentation thereof, to the efEect, that the petition is in all respects true, in matter of fact. This section is new. The statute formerly provided that the petition should be signed by the debtor and the requisite number of creditors. It was silent as to the contents of the petition. 2 R. S. 16, § 2 ; 3 R. S. 6th ed. 13, § 2 ; 2 Edm. St. 17. The Revised Statutes required that proof of residence or im- prisonment within the county where the officer to whom the petition was presented resided, should be made at the time of presenting the petition. 2 R. S. 35, § 3 ; 3 R. S. 6th ed. 28, § 2 ; 2 Edm. St. 36 ; and it was held that this preliminary proof of residence within the county was a jurisdictional fact. People ex Tel. Pacific Mut. Ins. Co. v. Machado, 16 Abb. Pr. 460 (Gen. Term, Supm. Ct. N. T. Co.) ; Matter of Wrigley, 8 Wend. 134 ; s. 0. 4 Id. 602 ; Rusher v. Sherman, 28 Barb. 416 ; Jenhs V. Stehhins, 11 Johns. 224 ; Otis v. Hitchcock, 6 Wend. 433. In the first case cited, where the petition of the insolvent recited that he was of the city, county and State of New Yoric, and annexed to the petition was an affidavit of a person who swore that he knew the insolvent, and that he was a resident and inhabitant of the State of New York, it was held that a dis- charge granted on these papers was inoperative, for the reason that it did not appear that the insolvent was a resident of, or was imprisoned within, the county in which the officer resided to whom the petition was presented. But it seems that under the Revised Statutes, if there were a positive averment of the fact of residence in the petition, no other proof would be necessary. Russell & Erwin Mfg. Co. v. Armstrong, 12 Abb. Pr. 472 ; affi'g 10 Id. 258, note. Compare Morewood v. Hollister, 6 N. Y. 309, 316 ; Pevelin v. Cooper, 84 N. Y. 410 ; affi'g 27 N. Y. Supm. Ct. R. (20 Hun), 188. The Code of Civil Pro- cedure requires no other proof of residence except a statement contained in the petition. If the petition is fatally defective all the proceedings including the assignment are void, at least against one who is not a bona § 13.J CONSENT OF CREDITORS. 19 fide purchaser for value without notice. Rockwell v. McOov- ern, 69 N. T. 294 ; distinguishing Roohwell v. Brown, 5-i N. Y. 210. § 13. Consent of the creditors to be annexed. — (Code C. P. § 2153.) The petitioner must annex to his petition one or more written instruments, executed by one or more of his creditors, residing in the United States, having debts owing to him or them in good faith, then due or there- after to become due, which amount to not less than two- thirds of all the debts, owing by the petitioner to cred- itors residinsr within the United States. Each instru- ment must be to the effect, thai the person or corpora- tion, executing it, consents to the discharge of the peti- tioner from his debts, upon his complying with the provisions of this article. This section is new. The consent of the creditors to the discharge was formerly in- dicated by their signatures to the petition. The consenting creditors must constitute at least two-thirds in amount of the creditors residing within the United States. This is a jurisdictional fact. In the case of Morrow v. Freeman (61 N. Y. 615), where the authorities were fully reviewed by Commissioner Dwight, it was held that where it appeared on the face of the proceedings that less than two-thirds of the cred- itors had joined in the petition, the officer before whom the pro- ceeding was had was without jurisdiction, and the discharge granted to the debtor was void. See Frary v. Dakm,, 1 Johns. 75. In several cases previously decided, it had been thought that the question of whether the requisite number had joined was one to be determined solely upon the hearing, and if then found in favor of the debtor, it was conclusive in the absence of fraud. Matter of Bradstreet, 13 Johns. 385 ; Fmherson's Case, 16 Abb. Pr. 457 ; Small v. Graves, 7 Barb. 576 ; Ayres v. Scrihner, 17 Wend. 407 ; Betts v. Bagley, 12 Pieij. 572. In the case of Eusher v. Sherman (28 Barb. 416), names were 20 THE TWO-THIRDS ACT. [CH. n. signed to the petition, without any amoant set opposite to them, but these persons were not named in the schedule as creditors, it was held that they were not to be regarded as creditors. Under the act of 1813 (1 K. L. 460) it was necessary, as under the present statute, that two-thirds of the creditors resid- ing in the United States should join in the petition. Saltern v. ToMas, 3 Paige, 338. The act of February 28, 1817 (Laws of 1817, c. 55, § 10), permitted foreign as well as domestic creditors to petition, and to be taken into the estimate in computing the requisite two-thirds. The Revised Statutes restored the act of 1813, in this respect, by inserting the last clause of this section. (See 2 E. S. 16, § 2.) The revisers, in their note to that sec- tion, said : " The whole current of authorities on these laws settles beyond dispute, that &reign creditors cannot be affected by a discharge, without their consent. It is therefore proposed to omit the provisions respecting them ; and as their debts cannot be taken into the account, in respect to the effect of the dis- charge, they ought not to be regarded in determining the num- ber of petitioning creditors." (See 5 Edm. St. 614.) The trustee may be nominated in the consent (§ 2176). § 14. Consent of Executor, Administrator, Receiver, &c. —(Code C. P. § 2153.) An executor or administrator may be- come a consenting creditor, under the order of the Sur- rogate's Court from which his letters issued. A trustee, official assignee, or receiver of the property of a creditor of the petitioner, whether created by operation of law or by the act of parties, may become a consenting creditor, under the order of a justice of the Supreme Court. A person who becomes a consenting creditor, as prescribed in this section, is chargeable only for the sum which he actually receives, as a dividend of the insolvent's laropcrty. See 2 R. S. 16, § 3, as modified by Laws of 1847, c. 280, § 16 ; 3 R. S. 6th ed. 13, § 3 ; 2 Edm. St. J7 ; also Laws of 1S50, c. 210 ; 3 R. S. 6th ed. 14, § 5 ; 4 Edm. St. 482. §§ 15-17.] COHSENT OF CREDITORS. 21 Previous to the act of 1850, it was held that a mere naked trustee without interest could not become a petitioning creditor without the consent of his cestui que trust. Matter of Sherryd, 2 Paige, 602. § 15. Consent of Corporation. — (Code C. P. § 2154.) Where a corporation or joint stock association becomes a con- senting creditor, its consent must be executed under its common seal, and may be attested by any director or other officer thereof, duly authorized for that purpose • who may make any affidavit, required of a creditor in the proceedings. 2 K. S. 36, § 7 ; 3 K. S. 6th ed. 29, § Y ; 2 Edm. St. 37 amended by inserting " or joint stock association." § i6. Consent of Partnership.— (Code C. P. § 2155.) Where a partnership becomes a consenting creditor, the consent may be executed in its behalf, and any affidavit, required of a creditor in the proceedings, may be made, by either of the partners. 2 R. S. 36, § 8 ; 3 R. S. 6th ed. 29, § 8 ; 2 Edm. St. 37 ; amended by omitting the words "or joint companies," which omission is supplied by the previous section. § 17. Effect of consent where petitioner is a joint debtor. —(Code 0. P. § 2156.) A creditor's consent does not affect his remedy against any person or persons indebted joint- ly with the petitioner ; and the petitioner's discharge has the effect, as between the creditor and the other joint debtors, of a composition between the petitioner and the creditor, made as prescribed in article third of title fifth of chapter fifteenth of this act. Laws of 1849, c. 176 ; 3 R. S. 6th ed. 13, § 4 ; 4 Edm. St. 22 THE TWO-THIRDS ACT. [CH. n. 451 ; ameuded by inserting the words " as between the creditor and the other joint debtors." The sections of the Code of Civil Procedure referred to are 1942-1944. Mr. Throop says that the object of the addition to this section is to settle the effect of the last clause of § 1944. See post, note to § 2184, as to the effect of a discharge of joint debtors as to creditors who have not expressly consented. § i8. Consent of purchaser of debt.— (Code C. P. § 2157.) Where a consenting creditor is the purchaser or assignee of a debt against the petitioner, or the executor, admin- istrator, trustee or receiver of such a purchaser or as- signee, he is deemed, for all the purposes of this article, except as to the declaration and receipt of dividends, a creditor only to the amount, actually and in good faith paid for the debt by him, or by the decedent or other jjerson, from whom he derives title, and remaining uncol- lected. This section is not affected by the recovery of a judgment for the debt, after the purchase or assignment; but in that case, the consenting creditor may include the uncollected costs, as if they were part of the sum paid for the debt. 2 R. S. 36, § 10 ; 3 R. S. 6th ed. 29, § 10 ; 2 Edm. St. 37 ; amended by adding the words " except as to the declaration and receipt of dividends," and also the last sentence in reference to the effect of recovery of judgment, which incorporates into the statute the ruling in Emherson's Case, 16 Abb. Pr. 457, where it was held that one who became a creditor of an insolvent, knowing him to be such, by buying a demand against him for less than the nominal amount of such demand and then obtained judgment for the whole amount, was to be deemed a creditor within the meaning of this section only to the amount actually paid. Where the insolvent procured his clerk to purchase from one of the creditors a judgment for a large sum upon a nominal con- § 19.] CONSENT OP CEEDITOKS. 33 sideration, which was, in fact, never paid, and the clerk became a petitioning creditor for the fall amount of the judgment, it was held that this fact was safiBcient to avoid the discharge with- out proof of actual fraud. Slidell v. MoCrea, 1 Wend. 156. But where the petitioning creditor had purchased the claim several years before the insolvent proceedings were instituted, and there was no evidence that the debtor procured the creditor to prove the claim for an amount larger than the amount actually due, it was not regarded as a ground to avoid the discharge that the creditor proved the claim at its face, and not for the amount which he had paid. Small v. Graves, 7 Barb. 576. § 19. Consenting creditor must relinquish security. — (Code 0. P. § 2158.) A creditor who has, in his owd name, or in trust for him, a mortgage, Judgment, or other se- curity, for the payment of a sum of money, which is a lien upon, or otherwise affects, real or personal property belonging to the petitioner, or transferred by him since the lien was created, cannot become a consenting cred- itor, with respect to the debt so secured, unless he adds to or includes in his consent, a written declaration, un- der his hand, to the effect, that he relinquishes the mort- gage, judgment, or other security, so far as it affects that property, to the trustee to be appointed pursuant to the petition, for the benefit of all the creditors. Such a dec- laration operates, to that extent, as an assignment to the trustee, of the mortgage, judgment, or other security ; and vests in him accordingly all the right and interest of the consenting creditor therein. 2 R. S. 36, § 11 ; 3 E. S. 6th ed. 30, § 11 ; 2 Edm. St. 37 ; amended by adding in the first sentence the words " transferred by him since the lien was created." Mr. Throop says, that " literally the original enabled a creditor, secured by a lien upon property originally belonging to the debtor, but owned by a third person at the time of the petition, to join in the applica- tion for the discharge of the debtor, without giving up his secu- 24 THE TWO-THIRDS ACT. [CH. II. rity, and to the prejudice of less fortunate creditors. This was not only unjust, and contrary to the supposed intention of the legislature, but a source of "grave difficulties, as, for instance, where the insolvent had given a bond and mortgage, and had after- wards conveyed the mortgaged property, subject to the mortgage, and the original mortgagee became a petitioning creditor, in re- spect to the money due to him upon the bond. The object of the first amendment is to remove this anomaly. The qualifica- tion of the effect of the transfer rests upon the same principle." The form in which the release to the assignee should be made is not prescribed by the statute. A substantial compliance with the statute is all that is required. In Augsbury v. Grossman, 17 Supm. Ct. (10 Hun), 389, 396, where the declaration attached to the creditor's signature was as follows : " For value received I hereby release to the assignee to he appointed, all claims on the estate of C. C, that I have by reason of the judgment against him assigned to me ;" this was regarded as a sufficient com- pliance with the statute. A compliance with this section appears to be essential when- ever the secured claim is necessary to make up the required two- thirds. In Morewood v. IloUister (6 N. Y. 309), it was deter- mined that when the petitioning creditors, who held collateral securities for any part of the debts due them, neglected to sign a declaration of relinquishment of such securities, they could not be regarded as petitioning creditors on account of the debts so secured, and when, after rejecting such debts, less than two- thirds in amount of the creditors of the insolvent, as shown by the petition, had joined in signing and presenting it, the officer to whom it was presented obtained no jurisdiction to grant a discharge. See opinion of James, J., in Hale v. Sweet, 40 N. Y. 97, 102 (dissenting on another ground) and see Augs- hunj V. Grossman, 17 Supm. Ct. (10 Hun), 389. But in the Matter of Philips (43 Barb. 108 ; s. o. 19 Abb. Pr. 281), it was held that where certain of the petitioning cred- itors were judgment debtors and did not, at the time of signing the petition, add to their signatures, a declaration that they re- linquished such judgment to the assignees to be appointed, though such relinquishment was subsequently, and before any further proceedings by the judge, obtained and attached to the §§ 20, 21.] AFPIDAYIT OF CONSENTINf CEEDITOE. 25 petition, the omission was a mere irregularity, and was cared. And see Russell da Erwin Mfg. Co. v. Armstrong (12 Abb. Pr. 472 ; affi'g, 10 Id. 258, note), and remarks of Hunt, Ch. J., in SouU V. Chase (39 N. T. 342, 345 ; s. c. 1 Abb. Pr. N. S. 48). The creditor is required to surrender only such liens and secu- rities as he has upon the estate and property of the debtor, and when the creditor has obtaiued a joint judgment against the in- solvent and another, the release of the judgment to the assignee of the insolvent does not affect the claim of the creditor against the other judgment debtor. JElsworth v. Caldwell, 48 N. Y. 680 ; affi'g 18 Abb. Pr. 20 ; s. c. 27 How. Pr. 188. A creditor who has the body of his debtor in execution, can- not be a petitioning creditor. Beaty v. Beaty, 2 Johns. Ch. 430 ; citing Burnahy's Case, Str. 653 ; Cohen v. Cvm,ningham, 8 Term R. 123 ; Ex parte Cundall, 6 Ves. 446 ; Ex parte Arundel, 18 Ves. 231. A sufficient reason for this rule is, that the imprisonment of the judgment debtor on execution, is in law a satisfaction of the judgment as long as the imprisonment con- tinues. Koenig v. Steckel, 58 N. Y. 475. § 20. Penalty if a creditor swears falsely. (Code 0. P. §2159.) If a creditor knovdngly swears, in any pro- ceedings authorized by this article, that the petitioner is, or will become, indebted to him, in a sum of money, which is not really due, or thereafter to become due ; or in more than the true amount ; or that more was paid for a debt, which was purchased or assigned, than the sum, actually and in good faith paid therefor ; he forfeits to the trustee, to be recovered in an action, twice the sum, so falsely sworn to. 2 R. S. 37, § 12 ; 3 R. S. 6th ed. 30, § 12 ; 2 Edm. St. 38 ; amended by extending the provision to a case where a debt was purchased. § 21. Affidavit of consenting creditor.— (Code C.P. § 2160.) The consent of a creditor must be accompanied with his affidavit, stating as follows: 26 T^ TWO-THIRDS ACT. [cu. 11. 1. That the petitioner is Justly indebted to him, or will become indebted to him, at a future day specified therein, in a sum therein specified ; and, if he, or the per- son from whom he derives title, is or was the purchaser or assignee of the debt, he must also specify the sum, actually and in good faith paid for the debt, as prescribed in section 2157 of this Act. 2. The nature of the demand, and whether it arose upon written security, or otherwise, with the general ground or consideration of the indebtedness. 3. That neither he, nor any person to his use, has re- ceived from the petitioner, or from any other person, pay- ment of a demand, or any part thereof, in money or in any other way, or any gift or reward of any kind, upon an express or implied trust, confidence, or understanding, that he should consent to the discharge of the petitioner. Where a consenting creditor is an executor, admin- istrator, trustee, receiver, or assignee, he may state the necessary facts, in his affidavit, upon information and be- lief, setting forth therein the grounds of his belief; but in that case, the consent must also be accompanied with the affidavit of the insolvent, to the effect, that all the matters of fact stated in the affidavit of the consentinc creditor, are true. 2 R. S. 16, § 4 ; 3 R. S. 6th ed. 14, § 7 ; 2 Edm. St. 17. The last paragraph supplies the place of Laws of 1850, c. 210, § 2 ; 3 R. S. 6th ed. 14, § 6 ; 4 Edm. St. 428. The last clause of sub- division 1 is added in accordance with § 2157, ante, and the pro- vision of the original section in reference to the officers before whom the affidavit should be taken is rendered unnecessary by § 842 Code of Civil Procedure. When a corporation is a creditor, the affidavit required by the statute may be made and signed by a diiector or other duly authorized officer. (See supra, % 2154.) And if partners or joint companies are creditors, the petition § 21. J AITIDAVIT OF CONSEKTIKG CEEDITOE. 27 may be made and signed by either of tiie partners or any one of sucb company. (See supra, § 2155.) Creditors residing out of this State may make affidavit as pro- vided by § 844 Code of Civil Procedure. In Eusher v. Sherman (28 Barb. 416), the affidavits of three of the petitioning creditors were sworn to before a New York commissioner residing in Connecticut. No certificate of the Secretary of State, as required by Laws of 1850, c. 270, was annexed to the affidavit to prove that the person administering the oath was, in fact, a commissioner for this State. The court held that the want of such certificate was not a jurisdictional defect, but one that was cured by the discharge, and it seems that the jurisdiction of the officer may be shown upon the hear- ing by parol proof. The affidavit should state : (1.) The sum due the petitioner (and if he is the assignee of the debt the sum actually paid for it, as prescribed by § 2157). (2.) That said sum is justly due to him, or that it will become due at a specified date. (3.) The nature of the demand, and whether arising on any written security or otherwise. (4.) The general ground and consideration of the indebtedness. (5.) That neither the petitioner nor any person to his use has received, from such insolvent or any other person, payment of any demand or any part thereof, in money or in any other way, or any gift or reward of any kind, upon an express or implied trust or confidence or understanding that he should consent to the discharge of the petitioner. It is important that the affidavit should comply with the re- quirements of the statute, otherwise the claim of the petitioner may be disregarded, and if his claim is necessary to make up the requisite two-thirds, the officer will acquire no jurisdiction. Gillies V. Crawford, 2 Hilt. 338. Thus, in the case last cited, the affidavit of one of the petitioning creditors stated simplj' that the sum annexed to his name was justly due to him from the insolvent, for two promissory notes, one of $2,000 and one of $2,550.91. This was held to be fatally defective, as not stating the nature of the demand with the general ground and consideration of the indebtedness. So when the affidavit was in 28 THE TWO-THIKDS ACT. [CH. II. the following words : " That the sum of $223 subscribed to the petition of E. C, an insolvent debtor, hereto annexed, is justly due to this deponent from the said insolvent, on a note of hand, given by the said E. C. to this deponent, on a settlement of accounts," &c., it was held that the nature of the account, or the general ground of the indebtedness, ought to be set forth in the affidavit. Matter of Cook, 15 Johns. 183. So, in another case, where the affidavit of one creditor specified the indebted- ness to be " on account of judgment entered against said insol- vent, justly due to him from said insolvent," and another cred- itor specified his indebtedness to be on account of a judgment entered against said insolvent upon a promissory note, it was held that in neither of these cases did the affidavits comply with the requirements of the statute. Merry v. Sweet, 43 Barb. 475 ; affi'd. Hale v. Sweet, 40 N". Y. 97 ; and see also Slidell v. McCrea, 1 Wend. 156 ; MoNair v. Gilbert, 3 Wend. 344 ; Stanton v. Ellis, 12 N. Y. 575 ; Taylor v. Williams, 20 Johns. 21 ; RusTier v. Sherman, 28 Barb. 416. § 22. When non-resident creditor to annex accounts.— (Code C. P. § 2161.) A consenting creditor, residing without tlie State, and within the United States, must annex to his consent the original accounts, or sworn copies thereof, and the original specialties or other written securities, if any, upon which his demand arose or depends. Pro- vided, however, that when such original specialties, or other written securities, are lost, such fact must be stated as a reason for not annexing thereto the consent, and the fact of the loss, and the manner of the loss thereof must be stated in the affidavit of the creditor to the best of his knowledge, or must be otherwise proved by affidavit to the satisfaction of the court ; and the court may there- upon, in such case or proceeding, by its order, dispense with the annexing to such consent of the original special- ties or other written securities. (As amended by Laws of 18S9, c. 502.) 2 E. S. 36, § 9 ; 3 E. S. 6th ed. 29, § 9 ; 2 Edm. St. 37. § 23.J SCHEDULE. 29 Where a partnership is a creditor, its place of business being within the State, and its business being controlled and managed by the partners who reside here, it seems that the partnership may be a petitioning creditor, although one of the members of the firm resides out of the United States. JRenard v. Ilargous, 2 Duer, 540 ; affi'd, 13 N. Y. 259. In Warrin's Case C16 Abb. Pr. 457, note), where the only petitioning creditor was a non-resident who held notes of the debtor given for the purchase-money of merchandise, and neither the original notes nor sworn copies of the notes or accounts were annexed to the petition, it was held that the annexing of the originals or sworn copies was essential to confer jurisdiction, and that the omission could not be supplied so as to give validity to the proceedings. § 23. Petitioner's schedule.— (Code C. P. § 2162). The peti- tioner must annex to his petition a schedule, containing : 1 . A full and true account of all his creditors. 2. A statement of the place of residence of each cred- itor, if it is known ; or, if it is not known, a statement of that fact. 3. A statement of the sum which he owes to each creditor, and the nature of each debt or demand, whether arising on written security, on account, or otherwise. 4. A statement of the true cause and consideration of his indebtedness to each creditor, and the place where the indebtedness accrued. 5. A statement of any existing judgment, mortgage, or collateral or other security, for the payment of the debt. 6. A full and true inventory of all his property, in law or in equity, of the encumbrances existing thereon, and of all the books, vouchers, and securities, relating thereto. 2 R. S. 17, § 5 ; 3 R. S. 6th ed. 14, § 8 ; 2 Edm. St. 18. The schedule should specify the debts with certainty. Stan- ton V. Mlis, 12 N. Y. 575. And where the name of the cred- 30 THE TWO-THIRDS ACT. [cH. n. itor was stated in the schedale, and the ground of the indebted- ness set forth, but the amount of the debt was left blank, it was held that the defect was fatal and the officer failed to acquire jurisdiction, for the reason that it was impossible to know that two-thirds in amount of the insolvent's creditors had subscribed his petition. Stanton v. Ellis, supra ; see Forman v. Drew, 4 Barn. & Cress. 15 ; Beeves v. Lambert, Id. 21i ; Levy v. Dolbell, 1 Moody & M. 202 ; Booth v. Goldman, 1 El. & El. 414 ; FranTclin v. Beesley, 1 Id. 425. In Matter of Cohen, 16 Daly, 69 ; 18 Civ. Pro. 156, where the schedule gave the street number of the residence of the cred- itors, but the name of the city or town was omitted, it was held that the schedules were fatally defective and could not be amended. Where the name of a creditor recently deceased was inserted in the list of creditors, whereas the name of the administrator of the deceased should have been entered, and it did not appear that the debtor had knowledge of the death, it was held that this did not invalidate the discharge. Wheeler v. Emmeluth, 65 Supm. Ct. 58 Hun, 369 ; affi'd, 125 N. Y. 750. The schedule should also set forth the true cause and consider- ation of the indebtedness in each case. The Act of 1817 (Laws of 1817, c. 55, § 11), provided that a failure to give a true ac- count of the consideration of the debt, should prevent a dis- charge, and should render fraudulent and void a discharge granted in such a case. Under that act it was held that a failure to state the consideration rendered the discharge absolutely void. McNair v. Gilbert, 3 Wend. 344. Such was the effect, also, of a defective statement of the consideration, as, for in- stance, that the debt was due on a note. Slidell v. McCrea, 1 Wend. 156 ; and see Taylor v. Williams, 20 Johns. 21. The statute, as it was incorporated into the Revised Statutes and as it now reads, is materially changed. The requirement is simply that the schedule shall state the true cause and consider- ation of the indebtedness in each case. Emott, J., in People v. Stryker, 24 Barb. 649, 651. It is believed that, under this lan- guage, it would be necessary to show a fraudulent intent in order to invalidate a discharge on the ground of a defective or insufficient statement of the consideration of the indebtedness. § 23.] SCHEDULE. 31 T][iis construction has been adopted under the subsequent article, where the same schedule is required {post, Art. II). Am. Flask c& Cap Go. v. Son, 7 Robt. 233 ; s. c. 3 Abb. Pr. N. S. 333, 337 ; see Matter of Rosenberg, 10 Abb. Pr. N. S. 450, 45i ; Devlin v. Cooper, 27 N. Y. Supm. Ct. E. (20 Hun), 188 ; affi'd, 84 N. Y. 410. And such has been the ruling, under this statute, when the question of the validity of the discharge arises in a collateral proceeding. Schaeffer v. Soule, 30 N. Y. Supm. Ct. (23 Hun), 583 ; People v. Stryker, 24 Barb. 649 ; Small v. Graves, 7 Barb. 577 ; Ayres v. Scrihner, 17 Wend. 407 ; Soule v. Chase, 1 Abb. Pr. N. S. 48, 60 ; but see remarks of Morgan, J., in Merry v. Sweet, 43 Barb. 476, 478. The mere omission to insert the name of a creditor in the schedule, without any evidence of fraudulent intent, will not be sufficient to invalidate the discharge. Am. Flask dh Gap Go. v. Son, 7 Eobt. 233 ; s. c. 3 Abb. Pr. N. S. 333 ; ainton v. JS^art, 1 Johns. 375 ; Lester v. Thompson, 1 Id. 300 ; Small v. Graves, 7 Barb. 577 ; Hall v. Bobbins, 61 Barb. 33 ; Ayres v. Scrihner, 17 Wend. 407. But where the debtor intentionally omitted the name of a debtor, claiming to have done so under the advice of counsel, this was held to be a palpable fraud which defeated the dis- charge. Starr v. Patterson, 27 Abb. N. C. 19. In the case last cited it was also held that the subsequent insertion of the name did not cure the defect. The same rule seems to apply to statements of assets. Thus, where the defendant omitted to state certain debts due to him, from the conviction that no part of them could be collected, the persons indebted to him being insolvent, it was held that he should not be prejudiced by having omitted them, since the omission did not appear to the court to proceed from a fraudulent intent. Brodie v. Stephens, 2 Johns. 289. But when the omis- sion was fraudulent, then the discharge was declared void. Duncan v. Duboys, 3 Johns. Cas. 125. The reversionary interest which a person has in property which he has assigned for the payment of debts, or of which a receiver has been appointed, must be included in the schedule. Billingls Case, 10 Abb. Pr. 258. 32 THE TWO-THIRDS ACT. [CH. 11. So, also, the remaining surplus and reversionary interest in property assigned to an assignee in bankruptcy. Bullyniore v. Cooper, 46 IST. Y. 236 ; see Roswog v. Seymour, 7 Eobt. 427. If the debtor does not know the name of the holder of a note or bill of exchange on which he is liable, he is then at liberty to give the best description he can of it. He may put in liis sched- ule the name of the original drawer (or payee), and so be dis- charged from the bill as to all other parties. If he knows the name of the holder of the bill, that is the name he is to insert. Boydell v. Champneys, 2 M. & "W". 433 ; see Beclc v. Beverly, 11 M. & W. 845 ; EomelUo v. Ralaghan, 1 Best & S. 279, under 7 Geo. IV, c. 57. Where an agreement was entered into between an insolvent and one of his creditors, that the creditor's debt should be omitted from the schedule, and should be paid immediately after the discharge, this was held to be a fraud upon the other cred- itors and upon the court. Tdbram v. Freeman, 2 Cr. & M. 451 ; see Howard v. Bartolozzi, 4 B. & Ad. 555. The insertion of the name of a creditor in the schedule with a memorandum that his claim is barred by the statute of limita- tions, is not an admission that he is still a creditor. Avery'' s Case, 6 Abb. Pr. 144. Defects in the schedules may be remedied by amendment on the return day of the order to show cause. Matter of Hurst, 7 Wend. 239 ; Matter of Rosenberg, 10 Abb. Pr. ISt. S. 460 ; Brodie v. Stephens, 2 Johns. 289. § 24. Petitioner's affidavit.— (Code C. P. § 2163.) An affida- vit, in the following form, subscribed and taken by the petitioner before the county judge, or, in the city of New York, before the Judge holding the term of the court, at which the order specified in the next section is made, must be annexed to the schedule : " I, , do swear" (or "affirm," as the case may be), " that the matters of fact, stated in the schedule hereto annexed, are, in all respects, just and true ; that I have not, at any time or in any manner whatsoever, disposed § 24. J petitioner's affidavit. 33 of or made over any part of my property, not exempt by express provision of law from levy and sale by virtue of an execution, for tbe future benefit of myself or my family, or disposed of or made over any part of my prop- erty, in order to defraud any of my creditors ; that I have not, in any instance, created or acknovpledged a debt for a greater sum than I honestly and truly owed ; and that 1 have not paid, secured to be paid, or in any vray com- pounded with, any of my creditors, with a view fraudu- lently to obtain the prayer of my petition." 2 E. S. 17, § 7 ; 3 E. S. 6th ed. 15, § 10 ; 2 Edm. St. 18. Amended by inserting the words " matters of fact stated in the schedule" in the place of "account of my creditors, and the inventory of my estate," and by inserting the clause in reference to exempt property. A compliance with the requirements of this section is requisite in order to give the ofl&cer jurisdiction. Where the affidavit was not sworn to before the judge, nor subscribed by him before granting the order for the creditors to appear and show cause, this was held to be a fatal defect which could not be cured by a subsequent verification. Ely v. Coohe, 28 IS". Y. 365 ; s. c. 2 Abb. Dec. 14 ; affi'g in part 9 Abb. Pr. 366 ; Small v. Wheaton, 4 E. D. Smith, 427 ; 2 Abb. Pr. 316. So, under the fourteen daj's act {post, Chap. VI), a similar requirement has been held to be mandatory. BuUymore v. Cooper, 46 N. Y. 236 ; Browne v. Bradley, 5 Abb. Pr. 141. The language of the affidavit should comply strictly with the statute. Thus, where the affidavit was in these words, " I have not at any time or iif any manner whatever disposed of or made over any part of my estate for the future benefit of myself and family," instead of using the words of the statute, "for the benefit of myself or family," this affidavit was held fatally de- fective, and the discharge granted in the proceedings was ad- judged void. Hale v. Sweet, 40 N. Y. 97 ; affi'g Merry v. 'Sweet, 43 Barb. 475. 3 CHAPTER III. THE ORDER TO SHOW CAUSE, NOTICE AND HEARING. § 25. The order to show cause.— (Code C. P. § 3164.) The petition and other papers, specified in the foregoing sec- tions of this article, must be presented to the court, and filed with the clerk. The court must thereupon make an order, requiring all the creditors of the petitioner to show cause before it, at a time and place therein spec- ified, why an assignment of the insolvent's property- should not be made, and he be thereupon discharged from his debts, as prescribed in this article ; and direct- ing that the order be published and served, as prescribed in the next section. 2 R. S. 18, § 8, and part of § 10 ; 3 R. S. 6th ed. 15, §§ 11, 13 ; 2 Edm. St. 18, 19. § 26. How order published and served. — (Code C. P. § 2165.) The order must be published and served in the following manner : 1. The petitioner must cause a copy thereof to be published in a newspaper, designated in the order, pub- lished in the county ; and also, if one-fourth part of the insolvent's debts accrued, or are due, to creditors resid- ing in the city of New York, in a newspaper published in that city, designated in the order. The publication must be made, at least once in each of the ten weeks, im- mediately preceding the day on which cause is to be shown, unless all the creditors reside within one hundred miles of the place where cause is to be shown ; in which § 26.] ORDER TO SHOW CAUSE. 35 case, the publication must be made, at least once in each of the six weeks, immediately preceding that day. 2. The petitioner must also serve upon each creditor, residing within the United States, whose place of resi- dence is known to him, a copy of the order to show cause, either personally, at least twenty days before the day when cause is to be shown, or by depositing it, at least forty days before that day, in the post office, in- closed in a post-paid wrapper, addressed to the creditor at his usual place of residence. Where the State is a creditor of the petitioner, a copy of the order must be served upon the Attorney- General, who must represent the State in the subsequent proceedings. 2 R. S. 18, § 10 in part, § 11 ; 39, § 30 in part ; 3 R. S. 6th ed. 15, § 13 in part, § 14 ; also 32, § 30 in part ; 2 Edm. St. 19, 40 ; also Laws of 184T, c. 366, § 1 ; 4 Edm. St. 481. Amended Laws of 1890, c. 231. The statute formerly provided that a " notice of the contents of the order" should be published. 2 R. S. 648, § 44 ; 3 R. S. 6th ed. 920, § 55. This section now requires the publication of " a copy of the order." The time between the first publication and the day appointed to show cause, should be at least the full number of weeks named in the order. Thus where the publication was ordered to be made for ten successive weeks, but there were in fact but sixty- eight days between the first publication and the hearing, the notice was deemed insufficient. People ex rel. Demarest v. Grmj, 10 Abb. Pr. 468 ; s. c. 19 How. Pr. 238 ; Anon. 1 Wend. 90. In Soule v. Chase, 1 Robt. 222 ; s. o. 1 Abb. Pr. N. S. 48 (rev'd in Court of Appeals on another ground, 39 N. Y. 342), it was held that if there be ten publications, it is not necessary that there be ten full weeks before the hearing. See Dieckerhoff v. Aklhorn, 2 Abb. N. C. 372, 377 ; Olcott v. BoUnson, 21 JST. Y. 150 ; Wood v. Morehouse, 45 N. Y. 368. But the publication must be made once in every week. It is 36 THE TWO-THIRDS ACT. [CH. HI. not enough that there be ten publications in all. The officer has no jurisdiction, if there be any of the ten weeks in which there was do publication. Diecherhoff v. Ahlborn, 2 Abb. N. C. 372. The period of publication must be computed so as to exclude the first day of publication and include the last. Code of Civ. Pro. § 787 ; see Brod v. Ileymann, 3 Abb. Pr. N. S. 396 ; Steinle v. Bell, 12 Abb. Pr. N. S. 171 ; Bunce v. Reed, 16 Barb. 347. The order must be published correctly. Thus where notice was directed to be given for the 6th of June, 1874, and the notice published was of an application to be made on the 3d of Juue, 1874, it was held that, until the pubhcation of the notice was made as directed, and proof of such publication was before the officer, he was without jurisdiction. People ex rel. Lewis v. Daly, 11 N. Y. Supm. (4 Hun), 641 ; s. c. 67 Barb. 325. The publication and service of the order as required by the statute is essential to the jurisdiction of the ofiicer ; of course not necessary to give him jurisdiction to make the order to show cause, but to give him jurisdiction to proceed to a discharge. Matter of Underwood, 3 Cow. 59 ; Lewis v. Page, 8 Abb. Pr. N. S. 200 ; Small v. Wheaton, 4 E. D. Smith, 427 ; Stan- ton V. Ellis, 16 Barb. 319 ; Van Slyke v. Shelden, 9 Barb. 278 ; People ex rel. Lewis v. Daly, 11 N. Y. Supm. Ct. (4 Hun), 641. But whether the sufficiency of the proof presented to and passed upon by the officer, can be inquired into in a collateral pro- ceeding, was doubted in Soule v. Chase, 1 Abb. Pr. N. S. 48, 58 ; 8. c. 1 Robt. 222 ; 39 N. Y. 342 ; and see opinion of Denio, J., in Stanton v. Ellis, 12 N. Y. 575, 580. Under the previous statute the names of the creditors were not required to be inserted in the notice ; all that was necessary was to direct the notice " To the creditors of , an insol- vent debtor." Am. Flask & Cap Co. v. Son, 7 Robt. 233, 238 ; s. c. 3 Abb. Pr. N. S. 333 ; see O'Connell v. Sutherland, 16 Abb. Pr. 460, note. Service by mail by depositing the notice in the post office in the same town where the creditor resides, is sufficient. 6>' Con- nell V. Sutherland, 16 Abb. Pr. 460, note. Where some of the creditors were stated in the affidavit to have their residence in New York city, no street being specified § 27.] KETUKN OF ORDER. 37 as the place of residence, and the envelopes containing the notices were directed to these creditors to JSfew York city gen- erally, and there was nothing to show that these notices were not addressed to the best knowledge of the insolvent, it was held that this was a sufficient mailing. People ex rel. Kenyan v. Sutherlaiid, 81 N. Y. 1 ; rev'g 16 Hun, 192. Where the name of a creditor Storrs appeared spelled Stores this was held to be a case of idem sonans, and the notice was deemed sufficient. Ibid. The general rule is that a debtor in insolvency proceed- ings will not lose his right to a discharge by an accidental omis- sion to give the required notice to one or more creditors. Weeks v. Buderus, 39 N. J. L. 448 ; s. c. 1 Am. Insol. E. 38. In Billinge v. Fichert, 46 Supm. Ct. (39 Hun), 504 ; s. o. 1 State R. 70, the order to show cause directed service, personally or by mail, to the creditor, "at his place of business," instead of " at his usual place of residence," and the record showed that service was made by mailing the order to the creditor at his place of business, it was held that the court did not acquire ju- risdiction to grant a discharge. It was further held (although the decision on this point appears to be open to doubt) that upon a trial where the discharge was pleaded as a defense, it was not competent to sustain the discharge by proof that personal service of the order was in fact made. See § 43. § 27. Proceedings on return of order. — (Code 0. P. § 3166.) On the day specified in the order, and before any other proceedings are taken in the matter, the petitioner must present to the court, and file with the clerk, proof, to the satisfaction of the court, that the order has been pub- lished and served, as prescribed in the last section ; and thereupon, on the same day, or upon the day to which the hearing is adjourned, the court must hear the alle- gations and proofs of the parties appearing. Proof of personal service of a copy of the order upon any person, must be made, in like manner as proof of personal ser- vice of a summons, in an action brought in the :5upreme Court. 38 THE TWO-THIRDS ACT. [CH. HI. 2 R. S. 18, § 12 ; Laws of 1847, c. 366, § 2, amended by adding last sentence ; 3 R. S. 6th ed. 16, §§ 16, IT ; 2 Edm. St. 19 ; 4 Edm. St. 481. When the time for the hearing has arrived, the officer may at once proceed to hear the proofs and allegations of the parties. He is not bound in strictness to wait beyond the arrival of the precise time appointed, though in the exercise of his discretion he maiy wait longer. Where a creditor who wished to oppose the discharge appeared after the hour of the return, and the officer refused to hear him, it was held to be a matter of dis- cretion which could not be reviewed on certiarari. Ex parte Hagaman, 2 Hill, 415 ; Matter of Pulver, 6 Wend. 632. But if, through any artifice, parties have been misled as to the time appointed, or have been prevented from appearing at such time, the judge has the power to vacate an order of assignment and let in the parties to oppose the discharge. Matter of Brad- street, 13 Johns. 385. The first step, and one required to be taken before the judge proceeds to hear the proofs and allega- tions of the parties, is to produce proof to the satisfaction of the judge or officer of the service of the order, either personally or by mail, as required by the sections cited ; and before any pro- ceedings, other than the hearing of the proofs and allegations, are had, the officer is directed to require proof of the publication of the order. Some proof of the service and publication of the notice upon which the officer can pass as to its sufficiency, is indispensable, and without it he acquires no jurisdiction to proceed further. See cases cited above ; also, Lewis v. Page, 8 Abb. Fr. N". S. 200, 204, Brady, J.; Stanton v. Ellis, 16 Barb. 319, 322 ; but see s. c. 12 N. Y. 575, 580. But whether, after proofs of ser- vice and publication have been submitted to the officer, and he has found that the statute has been complied with, the sufficiency of such proof can be questioned, in a collateral proceeding, has been doubted. Soule v.' Chase, 1 Abb. Pr. N. S. 48, 58 ; Stantmi v. Ellis, 12 N. Y. 575, 58C ; O'Connell v. Sutherland, 16 Abb. Pr. 460, note. Though it can undoubtedly be raised on certiora'i'i. People ex rel. Dema/rest v. Gray, 10 Abb. Pr. 468 ; s. c. 19 How. Pr. 238 ; Anon. 1 Wend. 90. The omis- sion in an affidavit of service of the notice to creditors to insert §§ 28, 29.] OPPOSING DISCHARGE. 39 the deponent's name in the commencement or caption, is not a defect for which the discharge can be avoided collaterally. 0' Connell v. Sutherland, 16 Abb. Pr. 460, note; People ex rel. Kenyan v. Sutherland, 81 N. Y. 1. Where the affidavit averred that the printed notice was served " on each of the following named persons on the days and in the manner next herein specified, that is to say ;" then immedi- ately followed a list of names of persons under the heading of " Names of Creditors," and in a column parallel with the list, and on the same line with each name, a statement of the city or town of residence, save in one instance where the word "un- known" appeared and immediately following was the averment : " By depositing, 1860, April 9, in the post office in the city of Brooklyn, a letter envelope directed to each of the foregoing creditors at the place of residence hereinbefore designated, and in each envelope was a printed notice, of which the following is a true copy, and on each envelope, so directed, was placed a post office stamp to pay the legal postage of each letter to its place of destination." This was held to be substantially an averment of a mailing of a notice to each creditor, and also held that the affi- davit would be deemed to mean that a stamp of value enough to pay the legal postage on each letter according to its address was placed thereon. People ex rel. Kenyan v. Sutherland, 81 :n. y. 1. § 28. Trial where discharge is opposed. — (Code 0. P. § 2167.) Where tlie insolvent's discharge is opposed, the court may direct tlie special proceeding to be placed upon the calendar for trial. In that case, the parties must appear, and the proceedings are the same, as in an action, except as otherwise prescribed in this article ; and costs, as in an action, except for proceedings before notice of trial, may be awarded to either party, in the discretion of the court. This section is new. § 29. Filing specifications. Jury trial.— (Code C. P. § 3168.) In order to entitle a creditor to oppose the discharge of 40 THE TWO-THIRDS ACT. [cH. m. the insolvent, he must, on the day fixed to show cause, or at such other time as the court directs, file with the clerk a specification of his objections ; and he may then, but not afterwards, demand a trial, by a jury, of the questions of fact arising thereupon. If a trial by a jury is not then demanded, the questions of fact must be tried by the court, without a jury. Where one of two or more opposing creditors demands a trial by a jury, all the ma- terial questions of fact, arising upon the objections of all the creditors, must be tried in like manner, and at the same time. The court may, in its discretion, direct the questions to be settled, and plainly stated, in an or- der, as where an order is made by the supreme court, in an action pending therein, for the trial of questions of fact by a jury. 2 R. S. 18, § 13 ; 3 R. S. 6tli ed. 16, § 18 ; 2 Edm. St. 19. If the creditors neglect to appear and raise objections they are concluded, if the officer had the requisite jurisdiction, except as to the matters which the statute declares shall avoid the assign- ment. People V. Stryker, 24; Barb. 649 ; Soule v. Chase, 39 N". Y. 342, 345, Ilnnt, Ch. J., dissenting on other grounds ; Matter of Bradstreet, 13 Johns. 385. Appearing and partici- pating in proceedings over which a court or officer has no juris- diction does not prevent a party from assailing them for want of it. Grocers' Nat. Bank v. Clark, 31 How. Pr. 115 ; Oaroie v. Sheldon, 3 Barb. 232. But where a judgment- creditor appeared by attorney upon the proceedings for a discharge of the debtor, and relinquished all opposition and consented to a discharge, but subsequently issued an execution on the judgment, it was held that the conduct of the attorney was equivalent to an abandon- ment of the suit, and that a perpetual stay of execution on the judgment ought to be granted. Lee v. Curtiss, 17 Johns. ^&. The opposing creditors may, of course, object to the granting of the order upon any of the grounds which would avoid the discharge, if granted ; but they may also controvert the facts which the officer or court is required to find before granting the § 30.] OPPOSING DISCHARGE. 41 order. They may oppose iipon the ground that the insolvent is not justly and truly indebted to the petitioning creditors in the sums by them respectively mentioned in their affidavits {Cohen'' s Case, 10 Abb. Pr. 257) ; that such sums do not amount in the aggregate to two-thirds of all the debts that were owing by such insolvent, at the time of presenting his petition, to creditors re- siding in the United States ; that such insolvent has not honestly and fairly given a true account of his estate, and has not in all things conformed to the matters required of him by the statute. Under the objection that the debtor has not given a true account of his estate, a creditor will have an opportunity to examine into all dispositions of the debtor's property. Cohen's Case, 10 Abb. Pr. 257. In the Matter of Hurst (7 Wend. 230), where a debtor had confessed a judgment which amounted to a general assignment for the benefit of all his creditors j>ro rata, it was held that this was such a fraud upon the insolvent laws as ought to defeat his discharge. The judgment in that case was confessed on the very day the petition was presented, and under suspicious circum- stances. The same month in which that case was decided, Chan. Walworth, in Corning v. White (2 Paige, 567), expressed the opinion that a creditor might assign his property without giving preferences, without depriving himself of the privilege of apply- ing for a discharge. Such is also the opinion expressed by Jones, J., in Roswog v. Seymour (7 Robt. 427, 430). See cases cited in note to § 2208, fost. § 30. Opposing creditor to file proof if not named in schedule.— -(Code C. P. § 3169.) Where the name of an op- posing creditor does not appear in the schedule, he must file, with the specification of his objections, proof, by aflidavit, that he is a creditor ; and, if his debt is not set forth in the schedule, he must also file his affidavit, to the effect specified in subdivisions first and second of section 2160 of this act. This section is new. It seems that every creditor, distinctly recognized as such in the schedule, may appear and oppose the discharge. All others; 42 THE TWO-THIRDS ACT. [CH. III. when they come in to oppose the discharge, must first prove their claims, otherwise they are not authorized to appear and oppose. Avery'' s Case, 6 Abb. Pr. 14i. A person named in the schedule as a creditor with a menioranduni that his claim is barred by the statute of limitations, cannot, without further proof of his claim, oppose the discharge. Avery's Case, supra. § 31. Proceedings if jury do not agree.— (Code C. P. § 2170.) There shall be but one trial by jury. If the jurors can- not agree, after being kept together for such a time as the court deems reasonable, the court must discharge them, and determine the questions of fact, or those questions as to which the jurors have not agreed, upon the evi- dence taken before the jury, as if a jury had not been demanded. 2 R. S. 19, § 19 ; 3 R. S. 6th ed. 16, § 24 ; 2 Edm. St. 20. § 32. Production of petitioner's non-resident wife.— (Code C. P. § 3171.) Where the petitioner's wife resides without the State, the court, or a judge thereof out of court, may, upon the application of any creditor, make an order, requiring the petitioner to bring his wife before the court, at the hearing or trial, to the end that she may be examined as a witness. A copy of the order must be personally served upon the petitioner, at least three weeks before the hearing. If it appears, upon the hearing, that service could not, with due diligence, be so made, in consequence of the petitioner's sickness or absence, the court may, in its discretion, adjourn the hearing or trial, and prescribe the time and manner of service of the order for the adjourned day. If, after due service, the petitioner's wife does not attend at the time and place appointed, the petitioner is not entitled to his discharge, unless he proves, to the satisfaction of the court, by his affidavit, or upon his oral examination, or §§ 33, 34. J WHAT PREVENTS DISCHARGE. 43 otherwise, that he was unable to procure her attend- ance. 2 R. S. 19, §§ 20, 21 ; 3 R. S. 6th ed. 16, 17, §§ 25, 26 ; 2 Edm. St. 20. Mr. Throop says, that the provisions revised in this section were framed with reference to the former rule of law excluding the wife as a witness ; but they have been retained because there are some cases where the truth can be more satisfactorily ascer- tained by her oral examination, and she must be presumed to be under the control of her husband. § 33. Examination of insolvent.— (Code 0. P. § 2173.) At the hearing or trial, the petitioner must be. examined under oath, at the instance of any creditor, touching his property or debts, or any other matter stated in his schedule, or any changes that have occuiTedin the situa- tion of his property, since the making of the schedule ; and particularly whether he has collected any debts or demands, or made any transfers of, or otherwise affected, his real or personal property. Any creditor may con- tradict or impeach, by other competent evidence, the testimony of the insolvent, or of his wife. 2 R. S. 20, § 22 ; 3 R. S. 6th ed. 17, § 27 ; 2 Edm. St. 20, " must" substituted for " may." § 34. What prevents discharge.— (Code C. P. § 2173.) In either of the following cases, the petitioner is not entitled to a discharge : 1. Where it appears, upon the hearing or trial, that, after making the schedule annexed to his petition, he has collected a debt or demand, or transferred, absolutely, conditionally, or otherwise, any of his property, not ex- empt by law from levy and sale by virtue of an execu- tion, and he neglects or refuses forthwith to pay over to the clerk, the full amount of all debts and demands so 44 THE TWO-THIRDS ACT. [CH. III. collected, and the full value of all property so trans- ferred, except so much of the money, and of the value of the property, as appears to have been necessarily ex- pended by him for the support of himself or his family. 2. Where it appears, in like manner, that the petition- er, within two years before presenting the petition, has, in contemplation of his becoming insolvent, or of his petitioning for his discharge, or knowing of his insolvency, made an assignment, sale, or transfer, either absolute or conditional, of any of his property, or of any interest therein, or confessed a judgment, or given any security, with a view of giving a preference to a creditor for an antecedent debt. 2 R. S. 20, §§ 23, 24, as amended by Laws of 1854, c. 147 ; 3 E. S. 6th ed. 17, §§ 28, 29 ; 2 Edm. St. 21. The Eevised Statutes allowed the insolvent to give security for the payment of the sum collected within thirty days. The creditors acquire no lien upon the property by the fact that the debtor has presented his petition. The property is still under the control of the insolvent. He may sell it, and though it may be improper for him to do so, the purchaser acquires a valid title. The title to the inventoried property cannot be effected until it is assigned according to the statute. Bailey v. Burton, 8 Wend. 339 ; see McNeilly v. Eichardson, 4 Cow. 607. This seems to have been the occasion for the first subdivision of this section. The revisers of the statutes (a.d. 1830) say : "It is supposed that the assignment passes only the property which the insolvent had at the time of its execution and deliv- ery ; as no retroactive effect seems to be given by the act. The consequence would appear to be, that he would not be re- quired to account for property sold or debts collected since the presentation of his petition. The above section has been drawn to prevent such conduct, and to remove any doubt that might ex- ist, whilst a suitable provision has been made for the support of the debtor and his family." 5 Edm. St. 615. The object of the second subdivision of this section was to pre- vent the execution of preferential assignments by depriving such § 34 ] WHAT PREVENTS DISCHARGE. 45 assignors of the benefit of the insolvent laws. " Preferences," say the same revisers in their note to this section, " may stiU be made either with the assent of creditors or at the hazard of losing the benefit of the insolvent laws. The doctrine evidently de- ducible from the statute, is that a debtor who creates a trust of all his property on behalf of creditors, giving preferences, can never claim a discharge from any debt existing when the trust was constituted. It is a legal bar created by this statute to the relief claimed by the insolvent." Where the insolvent, withiu two. years before presenting his petition, executed a general assignment giving preferences, it was held that the execution of the assignment was itself evidence of the insolvency of the assignor, and the statute operated as a bar to his discharge. Morewood v. HolUster, 6 N. Y. 309. An objection to a discharge upon this ground, must be taken at the hearing. A preference does not p^r se render the dis- charge void. Hayden v. Palmer, 24 Wend. 364. A debtor cannot set up as a defense to a note which he has transferred with the intent to give a preference, that the trans- fer was illegal. Hatch v. Brewster, 53 Barb. 276. The bankrupt law of 1867 (U. S. E. S. § 5110), provided that no discharge should be granted, or if granted, should be valid, in case the bankrupt had given any fraudulent preference con- trary to the provisions of the act. That section referred to such preferences as were made by one who was insolvent or in contemplation of insolvency or bank- ruptcy, and with the intent and purpose that the creditor re- ceiving it should have an advantage over the others. In re Brent, 8 N. B. E. 444 ; In re Jones, 13 Id. 286 ; Matter of Pierson, 10 Id. 107 ; In re Batchelder, 3 Id. 150. It did not, and such seems to be a reasonable construction of this section of our Etatute, refuse a discharge to an insolvent who, in ignorance of his condition, makes a payment in good faith although in fact insolvent. In re Brent, supra; In re Jones, supra; Matter of Pierson, supra; see Blumenstiel's Bankruptcy, p. 515. CHAPTER IV. ASSIGNMENT, DISCHARGE AND SUBSEQUENT PROCEEDINGS. § 35- When assignment to be directed. — (CodeC. P. §3174.) An order, directing the. execution of an assignment, must be made by tbe court, where it appears, by the ver- dict of the jury ; or, if a Jury has not been demanded, or the jurors have been discharged by reason of their in- ability to agree, where it satisfactorily appears to the court ; as follows : 1. That the petitioner is justly and truly indebted to the consenting creditors, in sums which amount, in the aggregate, to two-thirds of all the debts, which the peti- tioner owed, at the time of presenting his petition, to creditors residing within the United States. 2. That he has honestly and fairly given a true account of his property. 3. That he has, in all things, conformed to the matters required of him by this article. 2 R. S. 20, § 25, in part, the remainder being incorporated into the following section ; also § 26 ; 3 E. S. 6th ed. 17, 18, §§ 30, 31 ; 2 Edm. St. 21, 22. When an order of assignment has been made, the officer grant- ing the order cannot afterwards vacate it, unless there has been surprise on the opposing creditors, or they have been misled by the opposite party. Matter of Bradstreet, 13 Johns. 385. § 36. When court to direct assignment.— (Code C. P. § 3175.) The order must designate one or more trustees, residents of the State ; and must direct the petitioner to execute, to him or them, an assignment of all his proper- § 37.] ASSIGNMENT. 47 ty, at law or in equity, in possession, reversion, or re- mainder, excepting only so much thereof, as is exempt by law from levy and sale, by virtue of an execution. The assignment must be acknowledged or proved, and certified, in like manner as a deed to be recorded in the county, and must be recorded in the clerk's office of the county. "Where it appears, from the schedule or other- wise, that real property will pass thereby, it must be also recorded as a deed, in the proper office for record- ing deeds, of each county where the real property is situated. 2 R. S. 20, § 25 ; 38, § 20 ; 2R. S. 6th ed. 17, § 30 ; 31, §20 ; 2 Edm. St. 21, 39. A deed showing upon its face that it is an assignment made by an insolvent in proceedings to obtain his discharge under the statute concerning voluntary assignments, is sufficient to support an action of ejectment by the assignee where there is no affirma- tive evidence of any invalidity in the insolvent proceedings. Rockwell y. Brown, 54 N. Y. 210 ; rev'g 33 N. Y. Super. Ct. E. 380 ; 11 Abb. Pr. JS". S. 400 ; 42 How. Pr. 226. But when it appears that the proceedings in which the assignment is made are void for want of jurisdiction in the officer before whom they are had, an assignment made in the cause of such proceedings is likewise void, and vests no legal title in the assignee. The mention of a nominal pecuniary consideration in the assignment is not material. The assignment creates a statutory trust, and conveys no other estate or interest than that required for that purpose, and the assignee is invested with no other trust or in- terest than that described by the statute, merely by the insertion of a nominal consideration. Rockwell v. McGovern, 69 N. Y. 294 ; affi'g 40 Super. Ct. R. 118. § 37. Trustees, how chosen.— (Code C. P. § 2176.) The trustee or trustees may be nominated by a majority in amount of the consenting creditors. If no person is so nominated, one or more persons must be appointed by the 48 THE TWO-THIRDS ACT. [CH. IV. court for the purpose. The nomination may be included in the consent, or made in a separate papei", or orally upon the hearing or trial, and entered in the minutes. 2 R. S. 21, § 27 ; 3 R. S. 6th ed. 18, § 32 ; 2 Edm. St. 22. § 38. What passes by assignment.— (Code C. P. § 3177.) The assignment vests in the trustee or trustees all the petitioner's interest, legal or equitable, at the time of its execution, in any real or personal property, not exempt by law from levy and sale by virtue of an execution ; and any contingent interest which may vest within three years thereafter. When a contingent interest so vests, it passes to the trustee, in the same manner as it would have vested in the petitioner, if he had not made an as- signment. o 2 R. S. 21, § 28 ; 3 R. S. 6th ed. 18, § 33 ; 2 Edm. St. 22. An assignment by the insolvent of all his estate, real and per- sonal, passes the title to all the lands which he owns, without further description, and wliether specified in the inventory or not. Roseboom v. Mosher, 2 Den. 61. Property conveyed by the debtor in fraud of the rights of creditors, passes to the as- signees. Law of 1858, c. 311: ; 3 R. S. 6th ed. 146 ; and see Wai'd V. Van Bokkelen, 2 Paige, 289. Property held in trust does not pass by the assignment, and if such property remains in specie or in goods, or notes or other choses in action, the cestui que trust is entitled to the property, and not the general creditors of the insolvent. Kip v. Bank of New York, 10 Johns. 63 ; see Kennedy v. Strong, Id. 289. The title of the property of the insolvent is not afiEected by his proceedings in insolvency until actual assignment under the statute. Bailey v. Burton, 8 Wend. 339. § 39. When discharge to be granted.— (Code C. P. § 2178.) Upon the production by the petitioner of a certificate of the trustee or trustees, duly acknowledged or proved, and certified, in like manner as a deed to be recorded in §§^40, 41. J WHEN- DISCHARGE GRANTED. 49 the county, to the e£Fect, that the insolvent has assigned, for the benefit of all his creditors, all his property so di- rected to be assigned, and all the books, vouchers, and papers relating thereto, and that he has delivered so much thereof as is capable of delivery ; and also of a certificate of the county clerk, that the assignment has been duly recorded in his office ; the court must grant to the insolvent a discharge from his debts, vphich has the effect declared in the following sections of this article. 2 R. S. 21, § 29 ; 3 R. S. 6th ed. 18, § 34 ; 2 Edxn. St. 22. § 40. Proceedings where trustee refuses to give certifi- cate.— (Code C. P. §2179.) If a trustee refuses or neglects, upon payment or tender by the petitioner of the expense of so doing, to execute or acknowledge a certificate, as prescribed in the last section, or to cause the assignment to be recorded, as therein prescribed, the court, upon proof by affidavit of the facts, must make an order, requir- ing the trustee to show cause, at a time and place therein specified, why the petitioner should not be discharged, notwithstanding his neglect or refusal ; and why the trustee's appointment should not be revoked. 2 R. S. 38, § 23 ; 3 R. S. 6th ed. 31, § 23 ; 2 Edm. St. 39. § 41. The same. — (Code C. P. §2180.) If, upon the return of the order, it appears that the assignment has been duly executed, and that the petitioner has duly delivered all his property directed to be assigned, and all the books, vouchers, and papers relating thereto, which are capable of delivery, the court may, either 1. Grant a discharge of the petitioner, notwithstand- ing the neglect or refusal of the trustee ; or 2. Make an order, revoking the appointment of the trustee. Upon the entry of such an order, the powers of 4 50 THE TWO-THIRDS ACT. [CH. IV. the trustee, and his interest in the assigned property, cease. If there is no other tnistee, the court must, by the same or another order, appoint one or more new trustees. Such an appointment has the same effect, as if the person or persons so appointed were named as trustees in the original assignment. 2 R. S. 38, 39, §§ 24, 25, 26 ; 3 R. S. 6th ed. 31, §§ 24, 25, 26 ; 2 Edm. St. 39, 40. § 42. Recording of papers upon discharge.— (Code C. P. § ai81.) The discharge, and the petition, affidavits, orders, schedule, and other papers, upon which the discharge is granted, exclusive of the minutes of testimony, must be recorded in the clei'k's office of the county, within three months after the discharge is granted. In default there- of, the discharge becomes inoperative, from and after that time. The original discharge, the record thereof, or a transcript of the record, duly authenticated, is con- clusive evidence of the proceedings and facts therein con- tained. The other papers specified in this section, the record thereof, or a transcript of the record, duly authen- ticated, are presumptive evidence of the proceedings and facts therein contained. 2 R. S. 38, § 19 ; amended Laws of 1866, c. 116 ; 3 R. S. 6th ed. 31, § 19 ; 6 Edm. St. 701. The statute, as it formerly read, rendered the discharge inoperative until the papers were filed. See Barnes v. GUI, 13 Abb. Pr. N. S. 169, 172. § 43. Form of the discharge.— The discharge should be drawn with care. Its recitals are conclusive evidence of the statutory proceedings and facts, except those which are neces- sary to confer jurisdiction. Stanton v. Mlis, 12 N. Y. 575. If it contains a recital of all the facts, showing that the officer had general and special jurisdiction of the case, it is of itself sufficient evidence of the proceedings, without producing the § 44. J i'ORM OF DISOEIARGE. 51 record. 0' Gonnell v. Sutherland, 16 Abb. Pr. 460, note ; Barber v. Winslow, 12 Wend. 102 ; Carpenter v. White, 3 J. B. Moore, 231 ; Jenhs v. Stebhins, 11 Johns. 224 ; Lester v. Thomp- son, 1 Johns. 300. And when it contains such recitals, it fur- nishes protection to an officer who acts under it, as, for instance, a sheriff who discharges a prisoner. Bullymore v. Cooper, 46 K Y. 286; Develin v. Cooper, 84 N. Y. 410. But the recitals in the discharge are not the only evidence of the regu- larity of the proceedings. Bullymore v. Cooper, supra, 246 ; Richmond v. Praim, 31 Supm. Ct. (24 Han), 578. Nor does an omission in the discharge to state the performance of an act which is required by the statute to be done, raise a legal pre- sumption that it was not done. Salters v. Tobias, 3 Paige, 338. It is merely prima facie evidence of the facts necessary to confer jurisdiction, and it maybe avoided in a collateral action by proof of the non-existence of such facts. Morrow v. Free- mam,, 61 N. Y. 51.5 ; Hale v. Sweet, 40 N. Y. 97 ; Stanton v. Ellis, 12 ]Sr. Y. 575. When the discharge stated that the officer was satisfied that the debtor had conformed in all things to those matters required of him, according to the true intent and meaning of the act, before he directed an assignment, this was held to be a sufficient averment of the facts. Roosevelt v. Kellogg, 20 Johns. 208, 211. So, if it states that the insolvent has assigned " all his estate, both in law and in equity, in possession, reversion, and remainder," it is enough. Roosevelt v. Kellogg, supra. And if it does not except foreign creditors, that does not afEect its validity as against creditors of the United States. Ibid. For form of discharge, see Soule v. Chase, 1 Abb. Pr. N. S. 48, 49. § 44. Effect of discharge.— (Code C. P. § 2183.) Except as prescribed in the next two sections, a discharge, granted as prescribed in this article, exonerates and discharges the petitioner from every debt due at the time when he executed his assignment, including a debt contracted be- fore that time, though payable afterwards, and from every liability incurred by him, by making or indorsing a pro- 52 THE TWO-THIRDS ACT. [CH. IV. missoiy note, or by accepting, drawing, or indorsing a bill of exchange, before the execution of his assignment, or incurred by him in consequence of the payment, by any party to such a note or bill, of the whole or any part of the money secured thereby, whether the payment is made before or after the execution of the assignment. At any time after one year has elapsed, since the recording of the discharge, and the petition, affidavits, orders, schedule, and other papers upon which the discharge was granted, as prescribed in section twenty-one hundred and eighty- one of this act, the petitioner may apply, upon proof of his discharge, to the court in which a judgment shall have been rendered against him, for an order directing the judgment to be cancelled and discharged of record. If it appears that he has been discharged from the pay- ment of that judgment, an order must be made accord- ingly, and thereupon the clerk must cancel and discharge the docket thereof, as if the proper satisfaction piece of the judgment was filed. Notice of the application, ac- companied with copies of the papers upon which it is made, must be given to the judgment creditor, unless his written consent to the granting of the order, with satis- factoiy proof of the execution thereof, and if he is not the party in whose favor the judgment was rendered, that he is the owner thereof, is presented to the court upon the application. This and the next section are in place of 2 E. S. 22, §§ 30, 31 ; 3 E. S. 6th ed. 18, §§ 85, 36 ; 2 Edm. St. 22, 23. See notes to § 2183. Amended by Laws of 1883, c. 402. § 45. What debts may be discharged. — It seems to be a general and well-settled rule, that if the creditor at the time of the assignment by the insolvent debtor has not a certain debt due and owing, to which he can attest by oath so as to entitle him to a dividend of the insolvent's effects, he will not be barred § 45.] WHAT DEBTS DISCHARGED. 53 by the discharge. Meohanics' da Farmers' Bank v. Capron, 15 Johns. 467 ; Gardner v. Lay, 2 Daly, 113 ; Andrus v. Waring, 20 Johns. 153 ; Ransom v. Eeyes, 9 Cow. 128 ; Buel V. Gordon, 6 Johns. 126 ; Frost v. Carte)^ 1 Johns. Cas. 73 ; see Matter of Adams, 15 Abb. IST. C. 61, and note. But debts existing, though payable in the future, are within the act. WorJcman v. Leake, Cowp. 22 ; Jennings v. Jennings, Lofft, 433. And where a bond has become forfeited prior to the as- signment, and the sum due is capable. of liquidation, the demand upon the bond is barred by the discharge. Clinton v. Hart, 1 Johns. 375 ; Sammon v. Miller, 3. Barn. & Adol. 596. So an implied warranty of title of genuineness by one who transfers negotiable paper, if it turns out to be false, is broken the instant of the transfer, and the liability is therefore dis- charged by a subsequent discharge in insolvency, though the de- fect be not discovered until after the discharge. Murray v. Judah, 6 Cow. 484. The act does not apply to liability for torts, such as libel, tres- pass, and the like. Zinn v. Mitterman, 2 Abb. Pr. N. S. 261 ; Crouch V. Gridley, 6 Hill, 250 ; Strong v. White, 9 Johns. 161 ; Owen v. Routh, 14 Com. Ben. 327 ; Lloyd v. Neele, 2 Chitty, 222 ; Lloyd v. Peell, 3 Bar. & Aid. 407. So under the bankrupt law of 1867. In re Hennocksburgh, 7 N. B. K. 37 ; In re Sutherland, 3 Id. 314. In the case of an action against carriers for a breach of their duty, the cause of action is founded upon a contract, and the plaintiff cannot elude the effect of a discharge by bringing an action sounding in tort. So held under the bankrupt act of 1841. CampMl v. Perkins, 8 N. Y. 430. But when the claim for damages has become a debt by being converted into judgment before the assignment, it is within the statute. Luther v. Deyo, 19 Wend. 629 ; Deyo v. Yam, Val- kenburgh, 5 Hill, 242 ; Stewart v. Killmar, 19'Wend. 630, note ; Fx parte Thayer, 4 Cow. QQ ; People v. Marine Court, 3 Cow. 366 ; see Smith v. Bennett, 17 "Wend. 479 ; Ex parte Smith, 5 Cow. 276. So under the late bankrupt law. Ln re Hennocks- hurgh, 7 N. B. K. 37 ; In re Sidle, 2 N. B. E. 220 ; Li re Sheehan, 8 N. B. R. 345. The report of a referee, or the verdict of a jury, does not 54 THE TWO-THIRDS ACT. [CH. IV. cliange the nature of the demand. Kellogg v. Schuyltr, 2 Den. 73 ; Crouch v. Oridley, 6 Hill, 250 ; Black v. McClelland, 12 N. B. R. 481 ; In re Maybin, 15 Id. 468 ; Wilmer v. ^Yh^te, 6 Bing. 291. The discharge does not bar a claim against the insolvent as a factor or trustee for goods delivered to him to be sold for ac- count of the owner or consignor. Kennedy v. Strong, 10 Johns. 289 ; approved, s. c. 14 Johns. 128. Under the bankrupt law, debts created while acting in any fiduciary character were not discharged. See In re Seymour, 1 N. B. R. 29 ; In re Kimhall, 2 Id. 204 ; Zenke v. Booth, 5 Id. 351 ; Treadwell v. Uolloway, 12 Id. 61 ; Meador v. Sharpe, 14 Id. 492 ; Johnson v. Worden, 13 Id. 335 ; Orover v. Clin- ton, 8 Id. 312 ; Owsley v. Cohin, 15 Id. 489 ; Cronan v. Cotting, 104 Mass. 245. A discharge in bankruptcy does not affect a fine for contempt, and if one is discharged from imprisonment on that ground, he may be re-arrested. Spalding v. The People, 1 Hill, 301 ; affi'g 10 Paige, 284 ; affi'd, 4 How. U. S. 21. See Chap. VI. The burden of proof is on the party who seeks to show that a discharge of the debtor does not operate upon a certain claim because not provable at the time of the discharge. Harrison v. Lourie, 49 How. Pr. 124. When it is impossible to determine from the pleadings in a suit whether the plaintiff's claim is on contract or tort, the cred- itor must establish by other evidence that it is in tort. Harri- son v. Lourie, supra, Monnell, Ch. J. See post. Chap. V. A discharge does not operate on continuing contracts so as to permit the bankrupt or insolvent to enjoy the benefits, and ex- empt him from the liabilities of his contracts. Stinemets v. Ainslie, 4 Den. 573 ; Eohinson v. Pesant, 53 N. Y. 419. Thus a discharge is no bar to an action on an express covenant to pay rent, accruing subsequent to the insolvent's discharge. Lansing v. Prendergast, 9 Johns. 127 ; Frost v. Carter, 1 Johns. Cas. 73 ; see Hendricks v. Judah, 2 Caines, 25 ; Stinemets v. Ainslie, supra ; Newton v. Scott, 9 M. & W. 434 .; s. c. 10 Id. 471. Nor is it a bar to an action brought by the assignee of a policy of insurance against the defendant for not paying the annual premium to keep the insurance on foot. La Coste v. § 46.] DISCHAEaK OP SURETIES. 55 Gillman, 1 Price, 315 ; Bennett v. Burton, 4 Per. & Dav. 313. § 46. Discharge of sureties — Bail. — The discharge of the principal debtor urder the insolvent law, does not, as a general principle, discharge the surety. Buel v. Gordon, 6 Johns. 126 ; Hall v. Fowler, 6 Hill, 630 ; Bowery Sav. Banh v. Clinton, 2 Sandf. 113 ; Storms v. Waddell, 2 Sandf. Oh. 494 ; Page v. Bussell, 2 M. & S. 551 ; Welsh v. Welsh, 4 M. & S. 333 ; Soutten v. Soutten, 5 B. & Aid. 852 ; but see Moore v. Paine, 12 Wend. 123. Such is the express provision of the bankrupt act. U. S. R. S. § 5118. A.nd bail are not discharged by the discharge of the principal after they have become fixed. Hall v. Fowler, 6 Hill, 630. But before the liability of the bail has become fixed, the dis- charge of the principal operates as an exoneratur. Kane v. Ingraham, 2 Johns. Oas. 403 ; Merchants^ Bank v. Moore, 2 Johns. 294. But if the defendant fail to plead his discharge through neglect, the bail cannot be discharged on motion after judgment. Post v. Riley, 18 Johns. 54. If the surety pay the debt after the principal is discharged, it is not altogether free from doubt whether he can recover against the discharged principal. It has been held that a discharge under the bankrupt law of 1841 was a bar to an action for con- tribution brought by a surety against his discharged co-surety. Tobias v. Rogers (13 N. Y. 59), and in Mace v. Wells (7 How. U. S. 272), under the same act, it was held that where a surety on a note had paid it after the maker had been discharged in bankruptcy, the surety had lost his recourse against the maker. See Morse v. Hovey, 1 Sandf. Ch. 187, and, under the bank- rupt law of 1867, see Reitz v. The People, 16 N. B. R. 96. The principle of these decisions is, that the surety might have proved his debt in bankruptcy, but under our statute the surety could not prove his claim until after payment, and when the payment is not made until after the discharge is granted his claim against the principal is not barred. Buel v. Gordon, 6 Johns. 126 ; and see Powell v. Eason, 8 Bing. 23 ; Hocken v. Browne, 4 Bing. 1*^. C, 400 ; AUbott v. Bruere, 5 Bing. N. C. 598 ; Emery v. aarh, 2 0. B. N". S. 582, 591 ; Bitten v. Dal- ton, 17 0. B. E. S. 178. 56 THE TWO-THIRDS ACT. [CH. IV. § 47. Discharge of joint debtors.— Where one of two joint debtors is discharged from all his debts, that is a discharge from his joint as well as his separate debts. Willson v. Gomparts, 11 Johns. 193 ; see Edbertson v. Smith, 18 Johns. 4.59. But the discharge of one joint debtor does not discharge the others. Tooker v. Bennett, 3 Cai. 4 ; Moore v. Paine, 12 Wend. 123, 125. See Alger v. Raymond, 1 Bosw. 418. So under the bankrupt law of 1867. See U. S. R. S. § 5118. If, after the discharge of one, the other joint debtor pays the debt, he may then have his action over against the discharged debtor. Ford v. Andrews, 9 Wend. 312 ; Frost v. Carter, ] Johns. Cas. 73 ; see Elsworth v. Caldwell, 18 Abb. Pr. 20 ; s. c. 27 How. Pr. 188 ; 48 N. Y. 680. But not so of joint sure- ties. Tolias V. Rogers, 13 N. Y. 59 ; Waggoner v. Walrath, 31 Supm. Ct. (24 Hun), 443, 447. § 48. Judgments. — A discharge extinguishes a previous judg- ment, and where the judgment-creditor proceeded to enforce such a judgment by arresting the judgment-debtor, both he and the attorney who issued the execution were held liable in an action for false imprisonment. Deyo v. Van Yalkenburgh, 5 Hill, 242. This, of course, will not prevent the judgment- creditor from bringing an action upon the judgment in which the validity of the discharge can be tried. Under the insolvent laws, a case rarely happens where a judg- ment is recovered intermediate the assignment and the discharge. Under the bankrupt laws the question has frequently arisen, whethei* such a judgment merges the original claim and becomes a new debt arising subsequent to the filing of the petition. In this State it is now settled that where the judgment is ob- tained after the filing of the petition, but before the discharge upon a debt provable in bankruptcy, the judgment is not a new debt. McDonald v. Davis, 105 N. Y. 509 ; Monroe v. Upton, 50 N. Y. 593, 597 ; Clark v. Rowling, 3 X. Y. 216 ; Dresser V. Brooks, 3 Barb. 429 ; Fox v. Woodruff, 9 Barb. 498. But where the judgment is entered after the discharge upon a debt provable in bankruptcy, the judgment is not affected by the dis- charge. Revere Copper Co. v. Dimock, 90 N". Y. 33 ; affi'd 117 Q. S. 559 ; McDonald v. Davis, 105 N. Y. 509. § 48.] DISCHARGE OF JUDGMENTS. 57 Where a judgment for costs is given against a party who has obtained a discharge while the action is pending, the discharge does not bar a recovery on the judgment. Stebbins V. WiUson, 14 Johns. 403 ; Gardner v. Lay, 2 Daly, 113 ; see Wilkens v. Warren, 27 Me. 438. It was held otherwise in tliecase of a discharge under the bankrupt act of 1841. Leavitt V. Baldwin, 4 Edw. Ch. 289. Where a bankrupt recovers costs, after his discharge, against a creditor, the creditor cannot have such costs offset against the amount which was due to him before the discharge. Michles v. Brayton, 10 Paige, 138. Where a judgment is given against an insolvent for costs, before the discharge, it is immaterial whether the costs are or are not taxed before the discharge. They are capable of liquida- tion, and the judgment is discharged. Warne v. Constant, 5 Johns. 135 ; Thomas v. Striker, 3 Johns. Cas. 90 ; s. c. 5 Johns. 136, note. In Oone v. WhitaJcer (2 Johns. Cas. 2S0), the judgment of nonsuit was entered prior to the discharge, but the costs were not taxed until after the discharge, it was held that the costs were not a debt until taxation, and, of course, were not affected by the discharge. In the ease of Warne v. Constant (.5 Johns. 135), this rule seems to be shaken. It was there held, that where the judgment of nonsait is before the discharge, although the roll may be signed, and costs taxed afterwards, still the costs are barred by the discharge. Where the plaintiff, in an action commenced before he obtains a discharge, is nonsuited in such action, after the discharge, the costs of the action are not affected by the discharge. Stebbins v. WiUson, 14 Johns. 403. Where an action was brought on a judgment obtained after the passage of the act, upon debts contracted prior to the act, it was held that the plaintiff might go behind the judgment to show the date of the contract for the purpose of evading a subsequent discharge under the insolvent laws. Wyman v. Mitchell, 1 Cow. 316. And in Lester v. Christalar (1 Daly, 29), where the action was upon a judgment obtained in this State by a non-resident, it was held that the judgment did not constitute a new debt, so 58 THE TWO-THIEDS ACT. [CH. IV. as to render it a contract made within this State. See Ray- mond V. Merchant, 3 Cow. 147. Where an order was made cancelling a judgment under this section, and notice of the application had not been given to the judgment-creditor, it was held that the order was irregular and unauthorized. Wheeler v. Emmeluth, 121 N. Y. 241 ; rev'g 7 N. Y. Supp. 807. Upon a new application for the same relief, it appeared that the name of a creditor, recently deceased, had been inserted in the list of creditors, whereas the name of the administrator of the deceased should have beeTi entered. It did not appear that the debtor had knowledge of the death ; it was held that this error did not invalidate the discharge, and that the judgment should bo cancelled. Wlieeler' v. Emmeluth, 65 Supra. Ct. (58 Hun), 369 ; affi'd 125 N. Y. 750. § 49. Discharge of liability as indorser or maker of note. — ^The insolvent act of 1813 extended the discharge only to such debts as were due at the time of the assignment of the insol- vent's estate, and debts contracted before that time, thougli pay- able afterwards. Therefore, if an indorser of a promissory note paid it after the maker had been discharged under the insolvent act, he could still recover the amount from the maker, whose discharge would be no bar to the action. Frost v. Carter, 1 Johns. Cas. 73 ; s. c. 2 Cai. Cas. 311 ; Mechanics'' c& Farmers' Bankv. Capron, 15 Johns. 467 ; Ainslie v. Wilsorh, 7 Cow. 662. The act of 1819 (Laws of 1819, c. 101, p. 118, § 11) went so far in changing the law, so pronounced, as to exonerate, by the dis- charge, the indorser of a promissory note, though the note had not become due at the time of the discharge, and permitted the holder to come in for a dividend in the same manner as if the bill was due. The Revised Statutes (1830) extended the pro- tection of the discharge to the maker as well as the indorser of a promissory note. Ford v. Andrews, 9 Wend. 312. Section 2182 has amplitied, without materially changing, the Revised Statutes. Mr. Throop says, in note to Section 2183 : " It would seem, upon principle, that a discharge ought also to be a defense to every action for money paid to the use of the in- solvent, or for contribution, where the contract, upon which the cause of action arises, was made before the discharge, although §§ 50, 51. J CONSTITUTIONALITY. 59 the money is paid afterwards. But the original statute limited the effect of the discharge, to cases between parties to promis- sory notes and bills of exchange ; and an amendment, extend- ing the principle to all cases of joint contracts, and of principal and surety, would have opened the door to new questions, and probably to some doubt and confusion." Where the holder of a dishonored note joined in a petition for a discharge of the maker, a prior indorser who subsequently took up the note was held to have done so in his own wrong when under no legal obligation to do so, and therefore he had no remedy over against the discharged maker. Lynch v. Rey- nolds, 16 Johns. 41. The effect of a discharge upon negotiable paper is to destroy its negotiability. It discharges the debt for which the note is given ; the note becomes functus officio, and the person to whom it is transferred after the discharge, acquires no right to maintain an action upon it. Depuy v. Swart, 3 Wend. 135 ; Moore v. Vtele, 4 Id. 420. § 50. Debts not affected by discharge.— (Code C. P. § 2183.) In either of the following cases, such a discharge does not affect a debt or liability, founded upon a contract, unless it was owing, when the petition was presented, to a resident of the State ; or the creditor has executed a consent to the discharge ; or has appeared in the pro- ceedings ; or has received a dividend from the trustee : 1. Where the contract was made with a person, not a resident of the State. 2. Where it was made and to be performed without the State. 3. Where the creditor was not, at the time of the dis- charge, a resident of the State. See 2 R. S. 22, §§ 30, 31 ; 3 R. S. 6th ed. 18, §§ 35, 36 ; 2 Edm. St. 22, 23. § 51. Constitutionality. — How far the State Legislature may discharge an insolvent debtor from his contracts is a question 60 THE TWO-THIRDS ACT. [CH. IV. which has been extensively litigated. Objection was at a very early date raised to every attempt on the part of the State to grant discharges under insolvent laws, on the ground, first, that Congress, under its constitutional authority to establish uniform laws on the subject of bankruptcies throughout the United States, had exclusive power to legislate upon the subject ; and, secondly, upon the ground that such laws impair the obligation of contracts and are consequently repugnant to that provision of the Constitution of the United States, which prohibits a State from passing such laws. The first of these objections was met and overcome in the case of Sturges v, Crowninshield, 4 W heat. 122, in which case the law was declared to be " that since the adoption of the Constitution of the United States, a State has authority to pass a bankrupt law, provided such law does not impair the obligation of contracts, within the meaning of the Constitution, and provided there be no act of Congress in force to establish a uniform system of bankruptcy, conflicting with such law," and this position has ever since remained unquestioned. Ogden v. Saunders, 12 Wheat. 213 ; Boyle v. Zacharie, 6 Pet. 635, 638 ; Cooley's Cons. Lim. 294 (6th ed., 356). The second objection to the constitutionality of State insol- vent laws was passed upon by the Supreme Court of the United States in the cases of Sturges v. Orowninshield, 4 Wheat. 122, and Ogden v. Saunders, 12 Wheat. 213. The decision of that court was, that, as to contracts made before the passage of the insolvent law, the insolvent law was inoperative and void, hut as to contracts made after the passage of the law, the law was valid as to persons and contracts falling legitimately within its opera- tion, because the parties to such contracts were presumed to have had reference to the law in forming their contracts, and impliedly to have made the law a part of their contracts. What- ever may be said of the grounds upon which these decisions were placed (see remarks of Gardiner, J., in Donnelly v. Cm-hett, 7 N. Y. 500, 505 ; and see Olyphant v. Atwood, 4 Bosw. 459, 470 ; In re Reiman (& M'iedlander, 11 N. B. R. 21), the rule is now so well settled as to be beyond question. Sturges v. Orowninshield, supra y Ogden v. Saunders, supra ; CooJc v. Moffat, 5 How. U. S. 296, 309 ; Boyle v. Zacharie, 6 Pet. 348 ; Wyman v. Mitchell, 1 Cow. 316, 321 ; Mather v. Bush, § 52. J DEBTS DUE NON-RESIDEN'TS. 61 16 Johns. 233 ; Eoosevelt v. Cebra, 17 Id. 108 ; Baldwin v. Hale, 1 Wall. 223 ; Gilman v. Lockwood, 4 Wall. 409 ; Pratt v. Chase, 44 N. T. 597 ; Murphy v. Fhillrooh, 57 Supr. Ct. 204, The inhibition of the Constitution is wholly prospective. The States naay legislate as to contracts thereafter made as they may see fit. It is only those in existence where the hostile law is passed that are protected from its effect. Edwards v. Kearzey, 96 U. S. 595 ; Denny v. Bennett, 128 U. S. 489. § 52. Debts due non-resident creditors not discharged. — It is settled law that a discharge under our insolvent acts oper- ates upon all contracts made within this State between citizens of this State subsequent to the passage of the act. The dis- charge, as we have seen, is in such a case held not to impair the obligation of a contract, because, being made after the law, the parties are presumed to have had reference to the law, and im- pliedly to have made it a part of the contract. Sutherland, J., in Wyman v. Mitchell, 1 Cow. 316, 321 ; Mather v. Bush, 16 Johns. 233 ; Roosevelt v. Cehra, 17 Id. 108 ; Sturges v. Crowninshield, 4 Wheat. 122 ; Ogden v. Saunders, 12 Wheat. 213 ; Boyle v. Zacharie, 6 Pet. 348 ; Hides v. Hotchhiss, 7 Johns. Ch. 297 ; Jaques v. Marquand, 6 Cow. 497 ; J)on- nelhj V. Corhett, 7 N". Y. 500. In the Matter of Wendell (19 Johns. 153), where the debt was contracted in 1812, after the repeal of the act of 1811, and while the act of 1801 was in force, which authorized a discharge on the petition of three-fourths in amount of all the creditors, and the debtor subsequently obtained a discharge under the act of 1813, which permitted a discharge on the petition of two- thirds in amount of the creditors, it was held that the greater facilities afforded by the latter act so materially changed the law in force at the time of making the contract, as to render the dis- charge ineffectual as to that debt. Debts due to non-resident creditors are governed by different rales. Such debts cannot be discharged without the express or implied consent of the non-resident creditor. It appears to have been formerly supposed that whatever effect might be given to a discharge granted by the courts of this State, when brought in question in a foreign tribunal, that such a dis- 62 THE TWO-THIRDS ACT. [cH. IV. charge was a bar to all suits brought here upon antecedent con- tracts wherever made. Penninian v. Meigs, 9 Johns. 325 (1812). But this doctrine was overruled in the Supreme Court of the United States, in McMillan v. Mc-^'eill (4 Wheat. 209) ; Ogden v. Saunders (12 Wheat. 213). See remarks of Kent, Chan., in Eicks v. Hotclildss (7 Johns, c. 297). It was still sup- posed that when the contract was made here, although by non- residents of the State, or where, by its terms, it was to be exe- cuted here, a discharge under our insolvent laws would be a bar to an action here. ParTciyison v. Hcoville, 19 Wend. 150 ; Mat- ter of Wendell, 19 Johns. 153 ; SherriU v. Hophins, 1 Cow. 103 ; Bianchard x. Russell, 13 Mass. 1, 16 ; Scrilner v. Fisher, 2 Gray, 43. But these cases were overruled in the Supreme Court of the United States, in Baldtoin v. Hale (1 Wall. 223 ; s. c. 3 Am. L. Reg. N. S. 462, and note). See Daly, F. J., in Lester v. Christalar (1 Daly, 29, 30). Pratt v. Chase, 44 IS. Y. 597. And in the case of Donnelly v. Corhett (7 N. Y. 500), it was held tliat a debt contracted by a citizen of South Carolina, to a citizen of this State, was not discharged by a subsequent dis- charge under the insolvent laws of South Carolina, and that the discharge was no bar to an action here. See Yan Ilooh v. Whitlock, 26 Wend. 43. It is now settled by the decisions of the Supreme Court of the United States, as well as by the decisions of our own State, that insolvent laws have no extra-territorial efiBcacy, and are wholly ineffectual against non-residents of the State, even though the contract was by its terms to be performed in the State granting the discharge, unless indeed such non-resident creditor volun- tarily becomes a party to the insolvent proceedings or claims, or accepts a dividend thereunder. Ogden v. Saunders, 12 Wheat. 213 ; Cooh v. Moffat, 5 How. (U. S.) 295, 309 ; Boyle v. Zacharie, 6 Pet. 348 ; Baldwin v. Hale, 1 Wall. 223 ; Oilman v. Lock- wood, 4 Wall. 409 ; Kelley v. Drury, 9 Allen (Mass.), 27 ; Begina Flour Mills Co. v. Holmes, 156 Mass. 11 ; Bean v. Loryea, 81 Cal. 151 ; Satterthwaite v. Abercromhie, 21- Fed. E. 543 ; Pullen v. Hillman, 84 Me. 129 ; Soule v. Chase, 39 N. Y. 342 ; rev'g s. c. 1 Eobt. 222 ; Pratt v. Chase, 44 N". Y. 597 ; rev'g 29 How. Pr. 296 ; s. c. 19 Abb. Pr. 150 ; Donnelly v. Coriett, 7 N. Y. 500 ; Srnith v. Gardner, 4 Bosw. 54 ; Bal- § 53.] DEBTS MADE "WITHOUT THE STATE. 63 lard V. Webster, 9 Abb. Pr. iOl ; Stirn v. McQuade (^. H. Supm. Ct.), 22 Atl. K. 451 ; Denny v. Bennett, 128 U. S. 489. The cases of Olyphant v. Atwood (4 Bosw. 459) and Ritchie v. Garrison (10 Abb. Pr. 246), must be regarded as overruled in the later cases cited, although no allusion appears to have been made to them. Residence within the meaning of the insolvent laws is not equivalent to citizenship. A creditor resident and domiciled in the State at the time the debt was contracted and the discharge obtained is bound by the proceedings, although he be an alien. Yon Glahn v. Varrenne, 1 Dill. 515. On the effect of a discharge in insolvency upon non-residents see an article In 6 Harvard Law Review, 349, where the reported cases in the several States are collected. When a judgment is recovered by a trustee under a will, a subsequent discharge of the judgment-debtor will discharge the judgment if the trustee is subject to the jurisdiction of the court, although the beneficiaries of the trust are non-residents. Wade V. Sewell, 56 Fed. R. 129. § 53. Debts made and to be performed without the State, not discharged. — Mr. Throop, in his preface to this article, says that it seems to be settled that a discharge does not extin- guish a debt founded upon a contract made and to be performed without the State, and the second subdivision of § 2183 was in- serted as an enactment of what the codifiers regarded as the ex- isting law in that respect. The cases cited in support of the statement are Suydam v. Broadnax, 14 Peters, 67 ; GlarT&'s Exrs. V. Yan Riemsdyk, 9 Cranch, 153 ; Towne v. Smith, 1 Woodb. & M. 115 ; and Byrd v. Badger, 1 McAll, 263. In each of these cases it will be observed upon examination that, apart from the question of the place either of the making or of the performance of the contract, the creditor was in each instance a non-resident of the State granting the discharge. Hence, under the authorities above cited, the debt could not be dis- charged. The tendency of the decisions has been to base the power of the State to grant a discharge on its jurisdiction over its own citizens. " Whenever the question," says Clifford, J., in Bald- 64 TUE TWO-THIRDS ACT. [CH. IV. win V. Rale, 1 Wall. 223, 232, " has been presented to this court (U. S, Supreme Court) since that opinion was pronounced {Ogden v. Saunders, siipra), the answer has uniformlj been that the question depended upon citizenship." Commissioner Leon- ard, in Pratt v. Chase, 44 N. Y. 597, 599, says, " All the cases agree that the insolvent laws of a State are obligatory upon all citizens of the same State. As to creditors of the insolvent who are not citizens of the same State where the discharge is granted, the want of binding force to defeat the obligation of a contract is founded upon the want of jurisdiction over such creditors." The logical sequence of this reasoning is that citizens of this State, being subject to its laws, although tliey enter into a con- tract elsewhere, remain none the less citizens and none the less subject to our law. In the case of Pratt v. Chase, supra, it was decided that a debt contracted by a citizen of tliis State to a non-resident, was not extinguished by a subsequent discharge, although by its terms the contract was to be performed in this State. Baldwin v. Hale, 1 Wall. 223. To go further than this, and to provide that contracts made between citizens of our own State, when made elsewhere and to be performed elsewhere, must be excluded from the operation of our insolvent laws, is to exclude such contracts from the possibility of discharge any- where, and to extend the doctrine of comity further than any controlling authority has thus far required that it should be ex- tended. The provision of the section of course limits the effect of this discharge, and it appears to be in harmony with Witt v. Follett, 2 Wend. 457 ; Lowenberg v. Levine, 93 Cah 215. § 54. When the creditor is not at the time of the dis- charge a resident of the State, the debt not discharged.— The third subdivision of section 2183 excludes from the opera- tion of the discharge debts due to creditors who are not, at the time of the discharge, residents of the State ; so that, under the present statute, if the debt be contracted between residents of this State, and the creditor afterwards removes, a discharge from the debt cannot be obtained by the debtor under our in- solvent laws. Mr. TJiroop, in his preliminary note to this arti- cle, afiirms that this (vas the existing law under the decisions before the enactment of the code. In support of that opinion § 55.] CREDITORS WHO CONSENT. 65 he cites the following cases : Sturges v. Crowninshield, 4 Wheat. 122 ; Baldwin v. Hale, 1 Wall. 223 ; Baldmin v. Banh of Newbury, Id. 234 ; Oilman v. Lookwood, 4 Id. 409. In the first of these cases this precise question was not raised or passed upon. In each of the other cases cited, the creditor, at the time of malcing the contract as well as at the time of the discharge, was a non-resident. In the case of Stoddard v. Harrington, 100 Mass. 87, where the contract was made between citizens of Massachusetts, and the creditor shortly afterwards removed his residence to South Carolina, while the debtor, remaining in Massachusetts, obtained his discharge under the insolvent laws of that State, the discharge was held to be operative as against the non-resident creditor. The court (Hoar, J.) rested its de- cision upon Brigham v. Henderson, 1 Gush. 430, and Con- verse V. Bradley, Id. 434, note, and declared that nothing in- consistent with these decisions has been decided by the Supreme Court of the United States. The statute of this State has now declared the law to be the reverse of that stated in Stodda/rd v. Harrington, swpra, and in accordance with Pullen v. Hillmam,, 84 Me. 129 ; JVo7'ris v. Atkinson, 64 N. H. 87 ; Roberts v. Atherton, 60 Yt. 563. § 55' Creditors who consent, appear or accept dividend. — Non-resident creditors who have executed a consent to the dis- charge, or who have appeared in the proceedings, or who have received a dividend from the trustee, are bound by the dis- charge. The authorities are uniform, that the discharge in such cases is as binding upon non-resident as upon resident creditors. Clay V. Smith, 3 Pet. 411 ; Baldwin v. Hale, 1 Wall. 223 ; Oilman v. Lochwood, 4 Wall. 409 ; Van Hooh v. WhitlocJc, 7 Paige, 373 ; affi'g 26 Wend. 43 ; Soule v. Chase, 39 IST. Y. 342. The fact that the foreign creditor resorts to the courts of this State, and obtains a judgment, is not such a submission or assent to the jurisdiction of this State as to entitle it to release, by a discharge under its insolvent laws, the debt or obligation created by the judgment. DonneWy v. Corbett, 7 N. Y. 500 ; Soule v. Chase, 39 N. Y. 342, 344 ; Lester v. Christalar, 1 Daly, 29, 31 ; Wc/rthington v. Jerome, 5 Blatch. 279 ; Watson v. Bourne, 5 06 THE TWO-THIEDS ACT. [CH. IV. 10 Mass. 337. See tliis principle questioned, and the case last cited criticised, in Ogden v. Saunders, 12 Wheat. 213, 364, Johnson, J. In Third Nat. Bank v. Blastings, 134 K. Y. 501, affi'g 65 Supm. Ct. (58 Hun) 531, the accommodation maker of a promissory note resided in this State, the endorser, the real prin- cipal, a resident of the State of Massachusetts, procured the note to be diseoimted by the plaintiff, a corporation domiciled in ilassachnsetts ; the endorser afterwards became insolvent and obtained a discharge by composition proceedings under the Massa- chusetts statute ; the plaintiff proved the note in that proceeding and accepted a dividend. It was held that this did not discharge the maker, for the reason that the obligation as between the resi- dent of the State of Massachusetts was discharged, whether the debt was or was not proved, and therefore the principal debtor had taken no step to the prejudice of the surety. A State law discharging the person of a debtor from arrest for debt is valid, and not within the prohibition of the Constitu- tion, whether the debt was contracted before or after the lavv. Sturges v. Crowmnshield, 4 Wheat. 122 ; Ogden v. Sawnders, 12 Wheat. 213 ; Mason v. Haile, 12 Wheat. 370 ; Beers v. EangUon, 9 Pet. 329 ; Woodhull v. Wagner, Baldw. 296 ; Lee V. GavihJe, 3 Cranch's C. 0. 374 ; In re Jacobs, 12 Abb. Pr. N. S. 273 ; Shears v. Solhinger, 10 Abb. Pr. N. S. 287. For the reason that the right to arrest is a part of the remedy only, for the same reason such a law can have no effect out of the jurisdiction of the State granting it. A debtor who has been thus discharged, if the debt has not been barred, may be sued here, and, in a proper case under our law, may be arrested and held to bail, notwithstanding the discharge. Wright v. Paton, 10 Johns. 300 ; Smith v. Spinolla, 2 Id. 198 ; White v. Can- fiehh 7 Id. 117 ; Sicard v. Whale, 11 Id. 194 ; Peck v. Hozier, 14 Id. 346. § 56. Debts due the United States.— (Code C. P. § 3184.) Such a discharge does not affect : 1. A debt or duty to the United States; or 2. A debt or duty to the State, for taxes or for money received or collected by any person as a public officer, §§ 57, 58.] RELEASE FKOM IMPRISONMENT. 67 or in a fidiiciary capacity, or a cause of action specified in section 1969 of this act, or a Judgment recovered upon sucli a cause of action. Except as prescribed in tMs sec- tion, the discharge exonerates the petitioner from a debt or other liability to the State, in like manner and to the same extent, as from a debt or liability to an individual. 2 R. S. 39, §§ 29, 30, as amended by Laws of 1859, c. 2 ; 3 R. S. 6th ed. 32, §§ 29, 30 ; 2 Edm. St. 40. § 57. Insolvent to be released from imprisonment. — (Code C. P. § 3185.) If, at the time when the discharge is granted, the petitioner is under arrest, by virtue of an execution against his person issued, or an order of arrest made, in an action or special proceeding, founded upon a debt or liability from which he is discharged, as prescribed in the foregoing sections of this article, he must be released from the arrest, upon producing to the oiBcei- his dis- charge, or a certified copy of the record thereof. If the adverse party wishes to test the validity of the dis- charge, he may procure a new order of arrest, or cause a new execution to be issued, as the case requires. 2 K S. 22, § 33 ; 3 R. S. 6th ed. 19, § 38 ; 2 Edm. St. 23 ; amended by adding the last sentence. § 58. When the discharge must be pleaded. — When the discharge is obtained before an action is brought, or while it is pending, the debtor must plead the discharge. It will be of no avail unless pleaded. Cornell v. Dakin, 38 M. Y. 253. And when the discharge is obtained after the action is commenced, it is not a matter of course to permit the defendant to plead it by supplemental answer. Where the defendant has been guilty of laches or fraud, or a strong case of injustice would arise by per- mitting the defense, the application to plead the discharge will be denied. Ilolyoke v. Adams, 59 N. Y. 233 ; affi'g 8 N. Y. Supm, (1 Hun), 223. Thus, in the case of Medbury v. &v)an 68 THE TWO-THIRDS ACT. [cH. IV. (46 N. Y. 200), a delay of fifteen months was fatal ; and in Barstow v. Hansen (9 N. Y. Supm. Ct. K. [2 Hiin], 333), the court denied an application to plead a discharge in banliruptcy ■when a long time had elapsed and the laches were unexplained. See Mechanics' BanTt v. Hazard, 9 Johns. 392 ; Scott v. Grant, 10 Paige, 485 ; Carter v. Goodrich, 1 How. Pr. 239 ; Stewart v. Isidor, 5 Abb. Pr. N. S. 68. If the defendant neglects to plead the discharge, having had an opportimity to do so, the court will not, as a rule, afterwards relieve him against the judgment on motion. Hudge V. JStmdle, 1 T. & 0. 649 ; jPrice v. Peters, 15 Abb. Pr. 197 ; ValTcenhurgh v. Dedericli, 1 Johns. Cas. 134 ; Palmer v. Hutchins, 1 Cow. 42 ; Mechanics' Bank v. Hazard, 9 Johns. 392 ; Desolryv. Morange, 18 Id. 336 ; ParJcinson v. Scoville, 19 Wend. 150 ; Steward v. Green, 11 Paige, 535. And where the defendant obtained his discharge after the testimony was closed, it was held that he should have applied for leave to plead in the action, and could not be relieved on motion after judg- ment. Price V. Peters, supra. But where the debtor was arrested on a judgment rendered upon the same day upon which he obtained his discharge under the insolvent act, it was held that he was entitled to relief by motion. Baher v. Judges of Ulster Com. Pleas, 4 Johns. 191. And this is the rule when the dis- charge comes too late to be pleaded, or where the defendant, for any reason, has no opportunity of interposing it as a defense. Baker v. Taylor, 1 Cow. 165 ; Palmer v. Hutchins, 1 Cow. 42 ; Monroe v. Upton, 50 N. Y. 593 ; Dresser v. Brooks, 3 Barb. 429 ; Cornell v. Dakin, 38 N. Y. 253. And it has been held that where the plaintifiE, in such a case, disputes the validity of the discharge, the judgment will be opened to permit the determination of that question. Mdbbott v. Van Beuren, 1 Cow. 44, note ; Baker v. Taylor, 1 Cow. 165 ; Hall x. Gor- don, 1 How. Pr. 99. But where the debtor might have availed himself of the discharge as a defense to the action, or has been guilty of gross laches in making the motion, relief will be denied him. Valkenburgh v. Dederick, 1 Johns. Cas. 133 ; Cross v. Hobson, 2 Caines, 102. § 59. Manner of pleading discharge.— Under the old prac- §§ 60, 61. J IMPEACniXG DISCHARGE. 69 tice it was necessary that the plea should state facts sufficient to show that the officer had acquired jurisdiction. Service v. Heer- mance, 1 Johns. 91 ; Roosevelt x. Kellogg, 20 Johns. 208 ; nines v. Ballard, 11 Johns. 491 ; Frary v. Dalcin, 7 Johns. 75 ; Saokett v. Andross, 5 Hill, 327 ; Sj)encer v. JBeehe, 17 Wend. 557 ; Turner v. Beale, 2 Salk. 521 ; LadbroTce v. James, Willes, 199. But it is no longer necessary to state the facts ■ conferring jurisdiction. It is sufficient to state that the determination of the officer has been duly given or made. Lvovngston v. Oaksmiih, 13 Abb. Pr. 183 ; Hunt v. Dutoher, 13 How. Pr. 538. See Code of Civ. Pro. § 532. But since the statute is in terms restricted to certain prescribed debts, it is necessary that the debtor should show that the debt to which he seeks to have the discharge applied was within the prescribed clauses. Thus the pleading must show that the debt was owing to a person resident within this State at the time when the petition for the discharge was presented, or owing to persons not residing within the State, who united in the petition for the discharge, or who accepted a dividend from the estate. Smith V. Bennett, 17 "Wend. 479. When a defendant relies upon a discharge in bankruptcy in another country as a bar to the action, he must set forth in his answer the statute under which the alleged proceedings were had, and certificate granted, and also such prior proceedings as warranted the granting of the certificate. Philipe v. James, 1 Abb. Pr. N. S. 311. § 6o. Discharge, how available after judgment. — If the discharge is obtained after judgment, the proper course for the judgment-debtor, is to apply for a perpetual stay of execution, on motion. Olarlc v. Bowling, 3 N. Y. 216, 227 ; Mather v. Bush, 16 Johns. 233 ; Dresser v. Shufeldt, 7 How. Pr. 85 ; Russell & Erwin Mfg. Co. v. Armstrong, 10 Abb. Pr. 258, n. ; Boyd V. Yanderhemp, 1 Barb. Oh. 273 ; Aloott v. Avery, Id. 347. Formerly the relief in such cases was by audita querela. Gla/rh v. RawUngs, sv/pra. § 6i. Impeaching the discharge in an action. — The certifi- cate of discharge, when it contains recitals of all the jurisdic- 70 THE TWO-THIKDS ACT. [OH. IV. tional matters, is evidence of the regularity of the proceedings, and furnishes prima facie proof of a valid discharge (see note to § 2181, Code C. P., ante, p. 50), but whenever the discharge is proved in an action, either by the certificate or by the record of the proceedings, it is open to attack upon any of the grounds mentioned in the succeeding section (see § 2186), or for an}' de- fect in the jurisdiction of the officer granting it. Mory^ow v. Freeman, 61 N. Y. 515, 517 ; Stanton v. Ellis, 12 N. Y. 575 ; Hale V. Sweet, 40 N. Y. 97 ; Small v. Wheaton, 2 Abb. Pr. 175, 178. But no objection touching the regularity of the proceeding merely, and not relating to the jurisdiction of the officer, can be raised in a collateral proceeding. The proper remedy in such cases is by a direct review of the proceedings on certiorari or by appeal. People v. Stryker, 24 Barb. 649 ; Btisher v. Sherman, 28 Id. 416 ; Soule v. Chase, 39 N". Y. 342 ; Schaefer v. So^ile, 30 N. Y. Supm. (23 Hun), 583. § 62. Impeaching the discharge, on motion. — On a motion to set aside an execution, or for a perpetual stay, on the ground that the judgment has been discharged, the validity of the dis- charge will not be tested upon affidavits. JVoUe v. Johnson, 9 Johns. 259 ; Manhattan Oil Co. v. Thorn, 14 Abb. Pr. 291, note ; Wall v. Thorn, Id. 292, note ; Bussell <& Erwin Mfg. Co. V- Armstrong, 10 Abb. Pr. 258, note ; Dresser v. Shufeldt, 7 How. Pr. 85 ; Beyo v. Van Valhenburgh, 5 Hill, 242 ; Bus- sell V. Packard, 9 Wend. 431 ; Pich v. Salinger, 11 Abb. Pr. 344 ; s. 0. 14 Id. 294, note ; see Am. Flask c& Cap Co. v. Son, 1 Robt. 233 ; s. 0. 3 Abb. Pr. N. S. 333 ; Gardner v. Lay, 2 Daly, 113. In a proper case the court will retain the levy, and direct a reference or an issue to test the validity of the dis- charge. Stuart V. Salhinger, 14 Abb. Pr. 291 ; Cramer v. , 3 Sandf. 700 (where the proper form of the order is speci- fied), or the court may open the judgment and permit the valid- ity of the discharge to be tried in the action. Baker v. Taylor, 1 Cow. 165 ; Mohhatt v. Van Beuren, 1 Cow. 44, note ; Palmer V. Eutchins, 1 Cow. 42 ; Bangs v. Strong, 1 How. Pr. 181. See this case commented on in Dresser v. Shufeldt, 7 How. Pr. 85. In Bohens v. Sweet, 55 N. Y. Supm. (48 Hun), 436, the de- §§ 63, 64. J NEW PROMISE AFTER DISCHARGE. 71 fendant soaght to have an order for ]iis examination in proceed- ings supplementary to execution set aside for the reason that he had obtained a discharge under the Act. In reply, plaintiff proposed to show by affidavits that the discharge had been frau- dulently obtained. It was held that the validity of the discharge could not be tried collaterally on affidavits. § 63. Plaintiff may discontinue without costs where de- fendant is discharged.^ — A plaintiff will be permitted to discon- tinue without costs upon showing that the defendant has been discharged under the insolvent act after suit brought. Case v. Belknap, 5 Cow. 422 ; Merritt v. Arden, 1 Wend. 91 ; Lud- low V. Hackett, 18 Johns. 252 ; Kellman v. Licher, 9 Abb. Pr. N. S. 288. But mere insolvency of the defendant will not fur- nish a ground for discontinuance without costs ; there must be an actual discharge under the act. Collins v. Evans, 6 Johns. 333. § 64. A new promise takes the debt out of the operation of the discharge. — "While it is true that the legal obligation to pay a debt discharged by the insolvent or bankrupt laws is ter- minated, and the remedy of the creditor is barred, yet the debt is not paid by the discharge, and the moral obligation to pay it remains, and this moral obligation is sufficient consideration to support a promise, on the part of the debtor, to pay the dis- charged debt. MoNair v. Gilbert, 3 Wend. 344 ; Scouton v. Eislord, 1 Johns. 36 ; Truerrmn v. Fenton, Cowp. 644 ; Erwin v. Saunders, 1 Cow. 249. A new promise to revive such a debt must be distinct, unam- biguous, and certain (Stej'n v. Nussbaum, 47 How. Pr. 489 ; see Geery v. Bucknor, 4 N. Y. Leg. Obs. 344), and it must be made after the discharge and not merely after the presentation of the petition. Stebiins v. Sherman, 1 Sandf. 510 ; see Stil- well V. Coope, 4 Den. 225. It is proper for the plaintiff, after a new promise to pay a dis- charged debt, to bring his action upon the original claim and not upon the new promise. Dusenhv/vy v. Hoyt, 53 N. Y. 521 ; affi'g 45 How. Pr. 147 ; Graham v. 0' Hern, 31 Supm. 73 THE TWO-THIRDS ACT. [cH. IV. (2J: Hun), 221 ; McNair v. GiTbert, 3 Wenrl. 344 ; Wait v. Morris, 6 Id. 394 ; Fitzgerald v. Alexander, 19 Id. 402. § 65. Discharge, when void.— (Code 0. P. § 2186.) A dis- charge, granted as prescribed in this article, is void, iu either of the following cases : 1. Where the petitioner wilfully swears falsely, in the aj0fidavit annexed to his petition or schedule, or upon his examination, in relation to any material fact, concerning his property or his debts, or to any other material fact. 2. Where, after presenting his petition, he sells, or in any way transfers or assigns, any of his property, or col- lects any debt or demand owing to him, and does not give a just and true account thereof, upon the hearing or trial, and does not pay the money so collected, or the value of the property so sold, transferred, or assigned, as prescribed in this article. 3. Where he secretes any part of his property, or a book, voucher, or paper relating thereto, with intent to defraud his creditors. 4. Where he fraudulently conceals the name of any creditor, or the sura owing to any creditor, or fraudu- lently misstates such a sum. 5. Where, in order to obtain his discharge, he procures any person to become a consenting creditor, wilfully, in- tentionally, and knowingly, for a sum not due from him to that person in good faith, or for a sum greater than that for which the holder of a demand, purchased or assigned, is deemed a creditor, as prescribed in this article. 6. Where he pays, or consents to the payment of, any portion of the debt or demand of a creditor, or grants or consents to the granting of any gift or reward to a credit- or, upon an express or implied contract, trust, or under- standing, that the creditor so paid or rewarded should § 65.] DISCHARGE, WHEN VOID. 73 be a consenting creditor, or shouM abstain or desist from opposing the discliarge. 7. Where he is guilty of any fraud whatsoever, con- trary to the true intent of this article. 2 E. S. 23, § 35 ; 3 E. S. 6th ed. 19, § 40 ; 2 Edm. St. 24 Subd. 5 as amended by c. 231 of Laws of 1890. All other objections to the discharge, except those named in this section, and such as go to the jurisdiction of the officer granting the discharge, must be taken at the hearing, and were formerly available only on certiorari {People v. StryJeer, 24 Barb. 649 ; Rusher v. Sherman, 28 Barb. 416), and now on appeal. Under this section the .acts which vitiate the discharge, are such as are connected with a fraudulent intent on the part of the debtor. " All the specific acts," says Eraott, J., in People v. Stryher (24 Barb. 649, 652), " enumerated in section 35" (now § 2186), " either of which will vitiate the proceedings, absolutely, are acts which are necessarily and irresistibly proofs of a fraudu- lent design ; which are, in short, of themselves, and by their necessary consequences, frauds upon the law itself." So it is remarked by Allen, J., in Small v. Gra/oes (7 Barb. 576, 580), " the act which will vitiate the discharge must be an act of the insolvent." See also Hall v. Pohhins, 61 Barb. 33 ; s. c. 4 Lans. 463. The Court of Appeals, in the case of Develin v. Cooper, 84 N. Y. 410, 418, have placed a construction upon the 7th sub- division of this section. They say (Folger, Ch. J.), " Our opinion is, that the fraud that renders a discharge void under the statu- tory provisions referred to, is one done in the proceedings under the statute to obtain a discharge, and not a fraud that has gone before and in which the making of the debt was involved." A neglect on the part of the assignee, to take the oath pre- scribed, cannot prejudice the insolvent or affect his discharge. People V. StryTcer, 24 Barb. 649. A failure on the part of the creditors, to appear and raise ob- jections on the return day of the order to show cause, will amount to a waiver of all irregularities in the proceedings, if the officer possesses the requisite jurisdiction, except as to those mat- ters which the statute declares sufficient to avoid the discharge. 74 THIi; TWO-THIRDS ACT. [cH. IV. People V. Stryker, 2i Barb. 6i9 ; Eusher v. Sherman, 28 Id. 416 ; Soule v. Chase, 1 Eobt. 222 ; s. c. 1 Abb. Pr. N". S. 48 ; Stanton v. Fllis, 16 Barb. 319 ; afE'd 12 N. Y. 575 ; Tai/lor v. Williams, 20 Johns. 21. § 66. Impeaching discharge on motion.— (Code C. P. §2187.) Where a person, who has been discharged as pre- scribed in this article, is afterwards arrested by virtue of an order of arrest made, or an execution issued, in an action founded upon a debt or liability from which he is so discharged, tlie adverse party may oppose his applica- tion to be released from the arrest, by proof, by affidavit, of any cause for avoiding the discharge, for want of juris- diction, or as specified in the last section. If such a cause is established, the application must be denied. 2 E. S. 38, §§ 21, 22 ; 3 K. S. 6th ed. 31, §§ 21, 22 ; 2 Edm. St. 39. Previous to the enactment of this section the authorities ap- peared to sustain the position that the discharge could be im- peached upon a motion to vacate an arrest on mesne process, but not upon execution. A7n. Flask cfe Cap Co. v. Son, Y Robt. 233 ; s. c. 3 Abb. Pr. N". S. 333 ; Dresser v. Shufeldt, 7 How. Pr. 85, 89 ; Heed v. Gordon, 1 Cow. 50 ; Noble v. Johnson, 9 Johns. 259 ; C Connor v. Dehraine, 3 Edw. Ch. 230 ; Rus- sell V. Paekard, 9 Wend. 431. But it seems that under this statute, if the discharge is ineffect- ual as to the debt, it is equally so as to the remedy against the person. Witt v. Follett, 4 Wend. 501. In that case the de- fendant had obtained his discharge under the act of 1813, which he interposed as a defense to a note made in New Hampshire while both parties were resident of that State ; the discharge ■was held ineffectual. The defendant then sought to have the discharge declared effectual to exempt him from arrest on the debt, on the ground that to that extent the discharge operated on the remedy only, and was not open to the objection made to the discharge of the contract. The court held that the object of the act was to discharge the debt, and the discharge of the §§67, 68.] AMENDMENT 0¥ PBOCEEDINGS. 75 person was only an incident which accompanied an actual dis- charge of the debt. § 67. Amendment of proceedings.— If, on the return of the order to show cause, the creditors appear and object on the ground of a mere irregularity, not going to the jurisdiction of the officer, an amendment may be allowed. Thus the insolvent has been permitted, on the hearing, to amend the schedules by inserting the consideration of debts named thereia. Matter of Hurst, 7 Wend. 239 ; Brodie v. Stephens, 2 Johns. 289 ; More- wood V. MolUster, 6 W. Y. 309 ; Matter of Rosenberg, 10 Abb. Pr. N. S. 450. " It has been the practice of the judges of this court," says Daly, First Judge of the Court of Common 'S'\q2& {Matter of An- driot, 2 Daly, 28, 30), " when proceedings of this kind have been instituted before them individually, and of other judges in this city, upon the authority of Brodie y. Stephens (2 Johns. 289), to allow the schedules to be amended, unless (whenever ?) they were satisfied that the omission was unintentional or rose from a misconception of the requirements of the statute." See Matter of Rosenberg, 10 Abb. Pr. N. S. 450 ; Matter of Thomas, Id. 114. But when the defect or irregularity relates to the jurisdiction of the officer, no amendment can be allowed. Thus, where the affidavit required to be made by the debtor, was not verified before the officer to whom the petition was presented, it was held that the omission could not be cured subsequently at the hearing. Small v. Wheaton, 4 E. D. Smith, 306 ; s. 0. 2 Abb. Pr. 175. § 68. Review of proceedings. — Under the Eevised Statutes proceedings under the two-thirds act were reviewable by certio- rari. 2 E. S. 49, § 47 ; 3 E. S. 6th ed. 43, § 52 ; People ex rel. Lewis v. Daly, 11 N. Y. Supm. (4 Hun), 641. They are now reviewable only by appeal. Code, § 2121. § 1356 of the Code of Civil Procedure provides, that " an appeal may be taken, to the general term of the Supreme Court, or of a superior city court, from an order, affecting a substantial right, made in a special proceeding, at a special term or a trial term of the same court. 76 THE TWO-THIRDS ACT. [CH. IV. or, in the Supreme Court, at a term of circuit court ; or made by a judge of the same court, in a special proceeding instituted before him, pursuant to a special statutory provision ; or insti- tuted before another judge, and transferred to, or continued before him." The effect of which is to provide for an appeal in special proceedings commenced before a judge or in court. By § 1357 of the Code of Cidl Procedure, appeals may also be taken to the Supreme Court, from an order affecting a substan- tial right made by a court of record possessing original jurisdic- tion, or a judge, in a special proceeding instituted in that court, or before a judge thereof, pursuant to a special statutory pro- vision. If the determination be adverse to the debtor upon the merits, and he does not succeed on appeal, he will be bound by the ad- judication and cannot renew the proceedings before another tribunal. The doctrine of res adjudicata applies to these pro- ceedings. Matter of Roberts, 17 Supm. Ct. (10 Hun), 253 ; s. c. rev'd on other grounds, 70 N. Y. 5 ; Demarest v. Darg, 82 N". Y. 281 ; People ex rel. Lodowick v. Akin, 4 Hill, 606 ; TFA^■fe V. Coats^oorth, 6 N. Y. 137 ; Yonkers cfe N. T. Fire Ins. Co. V. Bishop, 1 Daly, 449 ; Powers v. Witty, 42 How. Pr. 352 ; and see Matter of Eosenherg, 10 Abb. Pr. N. S. 450 ; Matter of Thomas, Id. 114, and post. Chap. VI. PART II. OF PEOCEEDINGS BY AND AGAINST INSOL- VENT DEBTORS IMPRISONED OR LIABLE TO ARREST IN CIVIL ACTIONS. CHAPTER V. EXEMPTION PROM ARREST OR DISCHARGE PROM IMPRISON- MENT OF AN INSOLVENT DEBTOR. AETICLE SECOND, TITLE I, CHAPTEE XYII, CODE OF CIVIL PROCEDIJEE. § 69. Preliminary Note. — The act, the substance of which is incorporated into this article, was originally enacted in 1819 (Laws of 1819, c. 101), and was entitled " An Act to abolish imprisonment for debt in certain cases." That act, as revised, was inserted in the Eevised Statutes as article five, of title one, of chapter five, of part two. The proceeding considered in this article relates to applications to relieve a debtor from liability to imprisonment by reason of any debt arising upon contract, and if in prison by reason of any such debt that he may be discharged from his imprisonment. A valid discharge granted under the provisions of this article, operates so that if a person in whose favor the discharge has been granted, should thereafter be sued in an action ex contractu for a debt due or contracted at the time of the application for a discharge, and should be arrested on the ground that the debt was fraudulently contracted, such person would be entitled to be discharged from arrest. Jones, J., in Am. Flash db Cap Co. V. Son, 7 Eobt. 233 ; s. c. 3 Abb. Pr. N. S. 333 ; Wright v. Bitterrmm, 1 Abb, Pr. IST. S. 428. 78 EXEMPTION FROM ARREST. [CH. V. So wlien, ia au action on contract, an order of arrest has been granted on the ground that the defendant was guilty of fraud in contracting the debt, and he has thereafter been arrested upon an execution issued upon the judgment, an application for his discharge may be made under this article as well as under the succeeding article. Devlin v. Cooper, 27 Supm, Ct. E. (20 Hun), 188 ; affi'd, 8J: K Y. 410. This article was not repealed by implication by the act to abolish imprisonment for debt (Laws of 1831, c. 300); nor by the sections of the Code providing for arrest on mesne process. Devlin. V. Cooper, 8i N. Y. 410. The provisions of this article wore not suspended by the pas- sage of the bankrupt law. Matter of Jacobs, 12 Abb. Pr. N. S. 273. § 70. Who may be exempted from arrest, and by what court.— (Code C. P. § 3188.) An insolvent debtor may be exempted from arrest, or discharged from imprisonment, as prescribed in this article. For that purpose, he must apply, by petition, to the county court of the county in ■which he resides, or is imprisoned ; or, if he resides or is imprisoned in the city of New York, to the Court of Common Pleas for that city and county. A person, who has been admitted to the jail liberties, is deemed to be imprisoned, within the meaning of this article. 2 E. S. 28, g 1 ; 3 E. S. Gth ed. 23, § 1 ; 2 Edm. St. 29. Amended by requiring the application to be made to the county court or the Court of Common Pleas, thus abrogating the rulings in Matter of Roberts, 70 N. Y. 5. The last clause of the section establishes the practice as it was formerly understood to exist, both under this and the succeeding article. See note to § 2200, Code C. P., post, p. 87. § 71.— Contents of petition.— (Code C. P. § 3189. ) The peti- tion must be in writing; it must be signed by the in- solvent, and specify his residence, and also, if he is in §§ 72, 73.] petitionee's aefidavit. 79 prison, the county in which he is imprisoned, and the cause of his imprisonment. It must set forth, in sub- stance, that he is unable to pay all his debts in full ; that he is willing to assign his property for the benefit of all his creditors, and in all other respects to comply with the provisions of this article, for the purpose of being ex- empted from arrest and imprisonment, as prescribed therein ; and it must pray, that, upon his so doing, he may thereafter be exempted from arrest, by reason of a debt, arising upon a contract previously made ; and also, if he is imprisoned, that he may be discharged from his im- prisonment. It must be verified by the affidavit of the insolvent, annexed thereto, taken on the day of the pres- entation thereof, to the effect, that the petition is in all respects true in matter of fact. 2 R. S. 28, § 1 ; 3 E. S. 6th ed. 23, § 1 ; 2 Edm. St. 29. Under the Eevised Statutes the application was to be made to certain judicial officers. It is now a proceeding in court and the ruling in Matter of Roberts, 70 N. Y. 5 ; s. c. 53 How. Pr. 199, is abrogated. § 72. Petitioner's schedule.— (Code C. P. § 2190.) The peti- tioner must annex to his petition, a schedule, in all respects similar to that required of an insolvent, as pre- scribed in section 2162 of this act. A portion of 2 R. S. 28, § 2 ; 3 R. S. 6th ed. 23, § 2 ; 2 Edm. St. 29. As to the form and requisites of the schedule, see § 2162, Code C. P., ante, p. 29 ; also Devlin v. Cooper, 84 IST. Y. 410 ; affi'g 27 Supm. Ct. (20 Hun), 188. § 73. Petitioner's affidavit,— (Code C. P. § 2191.) An affi- davit, in the following form, subscribed and taken by the petitioner, before the county judge, or, in the city of New York, before the judge holding the term of the •80 EXEMPTION FEOM AEREST. [CH. V. court at which the order specified in the next section is made, must be annexed to the schedule : " I, , do swear" (or " affirm" as the case may- be), "that the matters of fact, stated in the schedule hereto annexed, are, in all respects, Just arid true ; that I have not, at any time, or in any manner whatsoever, disposed of or made over any part of my property, not exempt by express provision of law from levy and sale by virtue of an execution, for the future benefit of my- self or my family, or disposed of or made over any part of my property, in order to defraud any of my creditors; and that I have not paid, secured to be paid, or in any way compounded with, any of my creditors, with a view that they or any of them should abstain from opposing my discharge. A portion of 2 R. S. 28, § 2 ; 3 E. S. 6th ed. 23, § 2 ; 2 Edm. St. 29. See notes to § 2163, Code C. P., a/iite, p. 33, and § 2204, post, p. 92. § 74. Order to show cause.— (Code 0. P. § 2192.) The petition, and the papers annexed thereto, must be pre- sented to the court, and filed with the clerk. The court must thereupon make an order, requiring all the creditors of the petitioner to show cause before it, at a time and place therein specified, why the prayer of the petitioner should not be granted ; and directing that the order be published and served, in the manner prescribed in section 2165 of this act, for the publication and service of an or- der made as therein prescribed. 2 E. S. 29, §§ 3, 4 ; 3 R. S. 6th ed. 23, §§ 3, 4 : 2 Edm. St. 29. In the Matter of Jacobs (12 Abb. Pr. N. S. 273), where the order was made returnable before F. L., one of the judges of the Court of Common Pleas, this was held to be a sufficient specification of the place of return, and to be a compliance with §§ 75, 76.] ORDER FOR ASSIGNMENT. 81 the statute. In that case it was also stated that the officer ac- qmred jurisdiction by the presentation of the petition and sched- ules, and that the order to show cause was an incident of, but not essential to, such jurisdiction. , For decisions as to the proper service of notice and publication, see § 2165, Code C. P., ante, p. 34. § 75. Application of previous sections.— (Code 0. P. § 3193.) The provisions of sections ->16fi, 2167, 2168, 2169, 2170, 2172, and 2173 of this act, apply to a speciah proceeding, taken as prescribed in this article. 2 R. S. 29, §§ 5, 6, 7 ; 3 E. S. 6th ed. 24, §§ 5, 6, 7 ; 2 Edm. St. 30, 31. See ante, pp. 37 to 45. A debtor who has given a preference contrary to the provisions of § 2173, cannot obtain a discharge under this article. Matter of Mower, 1 Law Bui. 39 ; People v. O'Brien, 3 Abb. Dec. 552 ; s. c. 6 Abb. Pr. N. S. 63 : s. o. 54 Barb. 38 ; affi'g 5 Abb. Pr. N. S. 223. § 76. Order for assignment — when and^how made. — (Code 0. P. § 2194.) An order, directing the execution of an assignment, must be made by the court, where it ap- pears, by the verdict of the jury, or, if a jury has not been demanded, or the jurors have been discharged by reason of their inability to agree, where it satisfactorily appears to the court as follows : 1. That the petitioner is unable to pay his debts. 2. That the schedule annexed to his petition is true. 3. That he has not been guilty of any fraud or con- cealment, in violation, of the provisions of this article. 4. That he has, in all things, conformed to the mat- ters required of him by this article. The provisions of sections 2175, 2176 and 2177 of this act apply to the order presci'ibed in this section, and to the assignment made in pursuance thereof, except that 6 82 EXEMPTION FROM AKREST. [CH. V. the trustee or trustees must be nominated, as well as ap- pointed, by the coui-t. 2 R. S. 29, 30, §§ 8; 9 ; 3 R. S. 6tli ed. 24, §§ 8, 9 ; 2 Edm. St. 30. § 77. The discharge.— (Code C. P. § 3195.) Upon the pro- duction by the petitioner, of the certificates of the trustee or trustees, and the county clerk, to the effect prescribed in section 2178 of this act, the court must grant to the petitioner a discharge, declaring that the petitioner is forever thereafter exempted from arrest or imprisonment, by reason of any debt due at the time of making the as- signment, or contracted before that time, though pay- able afterwards ; or by reason of any liability incurred by him, by making or indorsing a promissory note, or by ac- cepting, drawing, or indorsing a bill of exchange, before the execution of the assignment ; or in consequence of the payment, by any party to such a note or bill, of the whole or any part of the money secured thereby, whether the payment is made before or after the execution of the assignment, with the exceptions specified in section 2218 of this act. The discharge shall have the effect therein declared, as prescribed in this section. 2 R. S. 30, § 10 ; 3 R. S. 6th ed. 24, § 10 ; 2 Edm. St. 30. As to the certificate of the trustees, see § 2178, Code C. P., ante, p. 48, and § 2212, post, p. 102. The diseliarge of a debtor under this article applies only to claims arising on contract. Orocers' Nat. Banh v. Clark, 31 How. Pr. 115. Thus an insolvent is not entitled to a dis- charge from an indebtedness wJiich arose from his embezzlement of money, and evidences of debt which came into his possession as a clerk, in the course of his employment. Matter of Pie, 10 Abb. Pr. 409. But a creditor may waive the claim for tort, and then it seems the insolvent will be discharged. Matter of Pie, supra. To ascertain whether the creditor's claim is one in §§ 78, 79.] DISCHARGE. 83 tort or on a contract, the whole of the complaint must be con- sidered, and not particular words which may be contained in it. Grocers' JVat. £ank v. Clarh, supra; Harrison v. Lourie, 49 How. Pr. 124:. But after a claim for tort has been reduced to judgment, it becomes a quasi contract, and the debtor may be exonerated from arrest on such judgments. People v. Marine Court, 3 Cow. 366 ; Ex parte Thayer, 4 Cow. 66 ; Ilayden v. Palmer, 24 Wend. 364 ; Luther v. Peyo, 19 Id. 629. When a defendant has been discharged under this article, the plaintiff cannot, by discontinuing the action and bringing a new action based on the same state of facts, but sounding in tort and not in contract, procure a second arrest of the defendant. Peo- ple ex rel. Ritterman v. Kelly, 1 Abb. Pr. IST. S. 432. And a defendant so arrested will be discharged on habeas corpus. Ibid.; see Bieckerhoff y . Ahlborn, 2 Abb. K. C. 372. § 78. Recording of papers on discharge. — (Code C. P. § 219^!.) The provisions of section 2181 of this act apply to the discharge, and to the petition and other papers upon which it was granted. 2 E. S. 39, § 27 ; 38, §§ 19, 20 ; 3 E. S. 6th ed. 32, § 27 ; 31, §§ 19, 20 ; 2 Edm. St. 39, 40. § 79. Discharged debtor released from custody. — (Code C. P. § 2197.) If, at the time when the discharge is granted, the petitioner is imprisoned, by virture of an execution against his person issued, or of an order of arrest made, in an action or special proceeding founded upon a debt, liability, or judgment, as to which he is exempted from arrest or imprisonment, as prescribed in the last section but one, the officer must forthwith release him, on pro- duction of the discharge or a certified copy of the record thereof. 2 R. S. 30, § 11 ; 3 E. S. 6th ed. 25, § 11 ; 2 Edm. St. 31. A prisoner on the jail liberties is imprisoned within the mean- ing of this section. § 2188, Code C. P., ante, p. 78. 84 EXEMPTION FROM ARREST. [CH, V. § 80. Debts not affected, etc.— (Code C. P. § 2198.) A debt, demand, judgment, or decree, against an insolvent, dis- charged as prescribed in this article, is not affected or impaired by the discharge ; but it remains valid and ef- fectual, against all his propertj^, acquired after the exe- cution of the assignment. The lien, acquired by or under a judgment or decree, upon any property of the insolvent, is not affected by the discharge. 2 R. S. 30, § 12 ; 3 R. S. 6th ed. 25, § 12 ; 2 Edra. St. 31. § 81. Discharge, when void.— (Code 0. P. § 2199.) A dis- charge, granted to an insolvent as prescribed in this ar- ticle, is void, in the same cases, so far as they are ap- plicable, in which a discharge, granted as prescribed in article first of this title, is therein declared to be void ; and the validity of such a discharge may be tested in the same manner. 2 R. S. 30, § 13 ; 3 R. S. 6th ed. 25, § 13 ; 2 Edm. St. 31. CHAPTER VI. DISCHARGE OF AN IMPRISONED JUDaMENT DEBTOR FROM IMPRISONMENT. ARTICLE THIRD, TITLE 1, CHAPTER XVII, CODE OF CIVIL PROCEDURE. "THE FOUETEEN DATS' AOT." § 82. In general. — The proceedings discussed in tlie present article, commonly known as the " Fourteen Days' Act," are in- tended to enable debtors imprisoned on execution in civil actions to obtain a discharge from imprisonment upon making a full surrender of their property for the benefit of the creditors upon whose judgments and executions they are imprisoned. The fol- lowing sections of the Code of Civil Procedure are compiled with important changes, from article sixth, of title one, of chap- ter five, of part two, of the Revised Statutes. And the pro- visions of the Revised Statutes were taken largely from the act of April 9, 1813, entitled, " An act for the relief of debtors, with respect to the imprisonment of their persons." 1 R. L. 348.' ' Proceedings under this article have been rendered to a large extent un- necessary by amendments and additions to the Code of Civil Procedure. By Laws of 1886, c. 673, section 111 of the Code of Civil Procedure was amended so as to read as follows : " No person shall be imprisoned within the prison walls of any jail for a longer period than three months under an execution or any other mandate against the person to enforce the recovery of a sum of money less than five hundred dollars in amount or under a commitment upon a fine for contempt of court in the non-payment of alimony or counsel fees in a divorce case where the amount so to be paid is less than the sum of five hundred dollars ; and where the amount in either of said cases is five hundred dollars or over, such imprisonment shall not continue for a longer period than six months. It 86 THE FOUETEEN DAYS' ACT. [CH. VI. § 83. Who may be discharged.— (Code C. P. § 2300.) A person, imprisoned by virtue of an execution to collect a sum of money, issued in a civil action or special proceed- ing, may be discharged from the imprisonment, as pre- shall be the duty of the sheriff in whose custody any such person is held to discharge such person at the expiration of said respective periods without any formal application being made therefor. No person shall be imprisoned within the jail liberties of any jail for a longer period than six months upon any execution or other mandate against the person, and no action shall be commenced against the sheriff upon a bond given for the jail liberties by such person to secure the benefit of such liberties, as provided in articles fourth and fifth of this title for an escape made after the expiration of six months' imprisonment as aforesaid. Notwithstanding such a discharge in either of the above cases, the judgment creditor in the execution, or the per- son at whose instance the said mandate was issued, has the same remedy against the property of the peraon imprisoned which he had before such execution or mandate was issued ; but the prisoner shall not be again imprisoned upon a like process issued in the same action or arrested in any action upon any judgment under which the same may have been granted. Except In a case hereinbefore specified nothing in this section shall effect a commitment for contempt of court." It has been decided that this section, as thus amended, relates only to a prisoner held on final process or mandate after the sum due from him has been adjudged. If he is confined within the walls, the amount he is adjudged to pay determines whether the imprisonment shall end in three months or in six months. If he is on the jail liberties, the six months' period applies. Levy V. Salonion, 105 N. Y. 529. This case settles conflict in the lower courts. See Wars?iauer v. Webb, 10 Civ. Pro. 169 ; s. c. 18 Abb. N. C. 233 ; People ex rel. Sodding v. Grant, 10 Civ. Pro. 174, n. ; People ex rel. Lust v. Grant, 10 Civ. Pro. 158 ; People ex rel. Oolien v. Grant, 18 Abb. N. C. 231 ; s. c. 11 Civ. Pro. 55 ; Dalon v. Kapp, 11 Civ. Pro. 58. There is a further provision of the Code of Civil Procedure applicable to arrests under an order of arrest or execution in the City Court of New York, as follows : g 3163, Code of Civ. Pro. " Where it satisfactorily appears that a party, who is actually confined in jail, by virtue of an order of arrest, or an execution against the person, issued in an action brought in the court, is physically un- able to endure the confinement, and that he cannot procure bail, or the neces- sary sureties in a bond for the jail liberties, as the case requires, the court, or a justice thereof, may, in its or his discretion, by order, direct the sheriff to release him from custody. The sheriff must obey such an order. After such a release from an execution against the person, another execution, against the person of the judgment debtor, cannot be issued upon the judgment; but the judgment creditor may enforce the judgment against property, as if the execution, from which the judgment debtor was released, had been returned without his being taken." § 83.] WHO MAY BE DISCHARGED. 87 scribed in this article. A person who has been admitted to the jail liberties, is deemed to be imprisoned, within the meaning of this article. 2 E. S. 31, § 1 ; 3 E. S. 6th ed. 25, § 1 ; 2 Edm. St. 31 ; Laws of 1847, c. 390. The statute is very beneficial in its provisions and very gen- eral in its terms. It includes every person. An infant, there- fore, vpho is imprisoned on an execution, is entitled to the bene- fit of the act, notwithstanding his nonage. People ex rel. Smith v. Mullin, 25 Wend. 698. And, for a similar reason, it has been held that interest on the judgment will not be added, so as to enhance the amount above the sum named in the statute, and so impede the discharge. Ex 'parte Cashaden, 1 Cai. 346 (this decision was under the act of 1789). Before the enactment of the last clause of the above section, it had been held that a person charged by execution in a civil cause, whether in close custody or on the limits, whilst held in custody by virtue of such execution, was entitled to apply for his discharge. Coman v. Storm, 26 How. Pr. 84 ; s. c. 1 Eobt. 705 (Super. Ct. Gen. Term) ; disapproving ^yZanc?^ v. Comstock, 25 How. Pr. 429 ; s. o. as ComstocFs Case, 16 Abb. Pr. 233 (Saper. Ct. Sp. Term). Jails are to be considered as enlarged from the four walls of the ancient law to the assigned limits, and as long as the prisoner is within those limits, so long he is to be considered, in judgment of law, as in prison. Holmes v. Lansing, 3 Jolins. Cas. 73, 75, 76 ; Peters v. Henry, 6 Johns. 121, 124. It is immaterial whether the judgment upon which the execu- tion is issued, under which the prisoner is held, was obtained in an action for tort or upon contract. In either case the debtor will be entitled to his discharge, upon compliance with the stat- ute, if it be found that his proceedings are "just and fair." See § 2208, Code C. P. , post, p. 90. The People v. The Marine Court, 3 Cow. 366 ; Ex parte Thayer, 4 Cow. 66 ; Hayden v. Pakner, 24 Wend. 364 ; Luther v. Deyo, 19 Id. 629 ; Grocers'' Nat. Bk. V. Clark, 31 .How. Pr. 115, 127. A person committed by precept for contempt in not paying moneys ordered to be paid for temporary alimony, is a person 88 THE FOUETEEN DAYS' ACT. [CH. VI. imprisoned by virtue of an execution in a civil cause within the meaning of this section, and may apply for a discharge. Van Wesd V. Van Wezel, 3 Paige, 38 ; People v. Cowles, 4 Keyes, 38 ; s. c. 3 Abb. Dec. 507 ; see People v. CampbeU, 40 N. Y. 133 ; see In re Laokemeyer, 18 N. B. E. 270. But the statute does not extend to the case of commitment for a fine imposed upon a party for a contempt of court ; or where the party is imprisoned for the non-performance of some act or duty which is in the power of the defendant to perform. Van Wezel v. Van Wezel, supra. See Spalding v. llie Peo- ple, 7 Hill, 301 ; afE'g 10 Paige, 284. In such cases the pris- oner may seek release under Laws of 1843, c. 9, or § 2286 Code of Civ. Pro. See Matter of ISttinert, 36 Supm. Ct. (29 Hun), 301. And where a person is in charge of the sheriff, under an at- tachment to bring him into court to answer interrogatories in a proceeding for a contempt, an order discharging the person from imprisonment cannot operate to discharge the prisoner. Such a discharge is premature until after conviction. Jackson v. Smith, 5 Johns. 115 ; Bissell v. Ki]p, 5 Johns. 89. Whether a person imprisoned for costs of a proceeding, as for a contempt to enforce a civil remedy, is entitled to a discharge, was questioned in Patrick v. Warner (4 Paige, 397), by Wal- worth, Chan. See Laws of 1847, c. 390. So a person imprisoned under an execution, issued in a " ma- rine cause," in the Marine Court of the city of New York, may be discharged under this article. Parker v. Hesscltein, Daily Reg., July 31, 1880. § 84. To what court application to be made.— (Code C. P. § 2201. ) Application for such a discharge must be made by petition, addressed to the court from which the exe- cution issued ; or to the county court of the county in which he is imprisoned ; or, if he is imprisoned in the city of New York, to the Court of Common Pleas for that city and county. 2 R. S. 31, § 1 ; 3 R. S. 6th ed. 25, § 1 ; 2 Edm. St. 31. The application for a discharge under this article must be § 85.] WHEN PETITION MAY BE PRESENTED. 89 made to tlie court. A judge at chambers has no authority to grant a discharge in such a proceeding. Mather's Case, 14 Abb. Pr. 45 ; Matter of Walker, 2 Duer, 655. And the application should be made at a special, and not at a general term. Matter of Walker, supra. "When a petition for a discharge was, after due notice, pre- sented to a,nd acted upon by the County Court at one of its terms, the fact that the petition was addressed to the judge by whom the court was held, and not to the court itself, was held not to invalidate a discharge. Borthwiok v. Howe, 34 Supra. Ct. (27 Hun), 505. The County Court has jurisdiction of the subject-matter of this article. Bullymore v. Cooper, 46 N. Y. 236, 241 ; Hart v. Dxibois, 20 Wend. 236 ; Laws of 1847, c. 280, p. 328, § 29. The Court of Oyer and Terminer has power to deliver the jails, according to law, of all the prisoners therein ; but this refers only to eases of crimes. That court has no power upon habeas corjpus to order the discharge of a prisoner held upon exe- cution in a civil action. People v. Brennan, 61 Barb. 540. There is no authority to release a prisoner held under an execution against the person, in a civil action, because of his inability to endure his imprisonment {Moore v. McMahon, 27 Supm. Ct. [20 Hun], 44), except that conferred upon the Marine Court by § 3163 of Code of Civ. Pro. § 302 of the Code of Procedure referred specifically to contempts in proceedings supplementary to execution {Moore v. McMahon, supra), and § 2286 of the Code of Civ. Pro. refers to persons imprisoned for a contempt other than criminal contempt. § 85. When petition maybe presented.— (Oode 0. P. § 3203.) A person so imprisoned may apply for sucli a discharge, at any time ; unless the sum, or, where he is imprisoned by virtue of two or more executions, the aggregate of the sums, for which he is imprisoned, exceeds five hundred dollars ; in which case he cannot present such a petition until he has been imprisoned, by virtue of the execution or executions, for at least three months. 2 R. S. 31, §§ 1, 2 ; 3 E. S. 6th ed. 25, §§ 1, 2 ; 2 Edm. St. 31, 32. 90 THE FOURTEEN DAYS' ACT. [CH. VI. When the defendant is charged on an execution for less than $500, he is entitled to a discharge at once, upon giving fourteen days' notice. But when the execution is for more than $500, the defendant must hav^e been charged in execution for three months. It is not enough that his imprisonment under the execution and order of arrest has continued for three months. Dusart v. Delacroix, 1 Abb. Pr. N. S. 409, note ; Moran v. Secord, U. S. Cir. Ct. 15 Fed, E. 509. And where the papers on which the discharge is granted show that the judgment on which the debtor was taken in execution exceeded $500, but fail to show that he has been imprisoned for three months, the dis- charge is void. Browne v. Bradley, 5 Abb. Pr. 141 ; Matter of Rosenberg, 10 Abb. Pr. N. S. 450. Interest on the judg- ment will not be added so as to increase the amount to prevent the discharge. Ex parte Cashadero, 1 Cai. 346. § 86, Petition and schedules.— (Code C. P. § 2203.) The pe- tition must be in writing ; it must be signed by the peti- tioner ; and it must state the cause of his imprisonment, by setting forth a copy, or the substance, of the execu- tion, or, if there are two or more executions, of each of them. The petitioner must annex thereto, and present therewith, a schedule, containing a just and true account of all his property, and of all charges affecting the same ; as the property and charges existed at the time when he was first imprisoned, and also as they exist at the time when the petition is prepared ; together with a just and true account of all deeds, securities, books, vouchers, and papers, relating to the property, and to the charges there- upon. 2 R. S. 31, § 4 ; 3 R. S. 6th ed. 25, § 4 ; 2 Edm. St. 32, The form of the petition is not prescribed by the statute ex- cept as above stated, but sufficient should appear on the face of it to give the court jurisdiction. It should be addressed to the court from which the execution issued, or the county court of the county in which the petitionar is imprisoned ; or, if he is imprisoned in the city of New York, to the Court of Common § 86.J PETITION AND SCHEDULES. 91 Pleas for that city and county. Code C. P. § 2201. It should set forth the fact of the imprisonment of the petitioner, and the amount due upon the execution or executions for which he is held, and, if the amount exceeds the sum of &ve hundred dollars, that he has been imprisoned for three months {Browne v. Bradley, 5 Abb. Pr. 141 ; 3fatter of Eosenlerg, 10 Abb. Pr. JST. S. 450), the cause of the imprisonment, by setting forth the execution or executions or tlie substance of them. In the Matter of Moore, 1 Am. Insol. R. 95, it was held that the mere statement that the petitioner was imprisoned on an execution against his person was ijot sufficient, but that he must also disclose the cause upon which he became liable to arrest. In the Matter of Chajypell, 30 Supm. Ct. E. (23 Hun), 179, however, it was held, by the general term of the second department, that a petition showing simply that the petitioner was imprisoned upon an execution issued upon a judgment in a civil action was enough. And when the petition, in describing the judgment upon which the execu- tion was issued, gave the names of but one of two plaintiffs, and but one (the petitioner) of two defendants, and it appeared that the prisoner was held under but one execution, it was held that the omission to name all the parties in the petition was not a fatal defect. Goodwin v. Oriffis, 88 N. Y. 629. To the petition must be annexed a schedule containing a just and true account of all the prisoner's property, both as it existed at the time of the imprisonment, and at the time of preparing the petition. The statute is imperative, and the papers presented to the court must conform with exactness to its provisions. It is mat- ter necessary to the jurisdiction of the court, not only that a petition and account should be presented to it, but that they shall be the very petition and account specified. BulVymore v. Cooper, 4:6 N. Y. 236, 246 (affi'g 2 Lans. 71), Folger, J. ; People V. Banoher, 5 l!^. Y. 106 ; People v. Brooks, 40 How. Pr. 165. The statute requires that the petition shall contain an account of the debtor's estate, both as it existed at the time of the imprison- ment and at the time of preparing the petition. The reason for this duplicate account is given by Mullett, J., in People v. Bancker, 5 N. Y. 106, 123, and note. Its object is to prevent payments and transfers of property to other creditors than the 92 THE FOURTEEN DATS' ACT. [CH. VI. execution creditor during the period of imprisonment, when the debtor would be hkely to make terms with his more lenient creditors who had not proceeded to extremes with him, and then demand his liberty from the others on tendering the remaining fragments of his property. The fact that the debtor has filed a voluntary petition in bank- ruptcy, and that the assignee in bankruptcy has become clothed with the estate which he had at the time of the imprisonment, does not avoid the requirements of the statute that the petition must contain a just and true account of his estate as it existed at the time of his imprisonment. BvMymore v. Cooper, 46 N. Y. 236 ; People v. BrooTcs, 40 How. Pr. 165. A mere statement in the petition of the proceedings in bankruptcy is not enough. Bullymore v. Cooper, supra. N"o account of creditors is required by this article, for the reason that no creditors are interested in the proceeding, except such as have the debtor on execution. See Hall v. Kellogg, 12 K. T. 325, 333. § 87. Affidavit of petitioner.— (Code C. P. § 2204.) An affi- davit, in the following form, subscribed and taken by the petitioner, on the day of the presentation of the peti- tion, must be annexed to the petition and schedule : "I, ', do swear" (or "affirm," as the case may be) " that the matters of fact, stated in the petition and schedule hereto annexed, are, in all respects, just and true ; and that I have not, at any time or in any manner whatsoever, disposed of or made over any part of my property, not exempt by express provision of law from levy and sale by virtue of an execution, for the future benefit of myself Or my family, or disposed of or made over any part of my property, with intent to injure or de- fraud any of my creditors." 2 E. S. 32, § 5 ; 3 E. S. 6th ed. 26, § 5 ; 2 Edm. St. 32. The statute formerly required that the affidavit should be made at the time of presenting the petition. A question arose § 88.] NOTICE TO CEEDITOES. 93 whether the applicant was required to Uterally take the oath at that time, in which event some difficulty would arise from the fact that when the prisoner was in close confinement, there was no provision of the statute for producing the prisoner before the court at the time of presenting the petition. The general term of the Supreme Court, in the case of Itichmond v. Praim, 31 Supm. Ct. (2i Hun), 578, held that if the afiidavit accom- panied the petition, although not sworn to in the presence of the court at the time of the presentation of the petition, the statute was complied with. Borthwick v. Howe, 34 Supm. Ct. (27 Hun), 505 ; Matter of Finch, 2 Mon. L. B. 69 ; see Bully- more V. Cooper, 2 Lans. 71 ; affi'd 46 N. T. 236 ; Browne v. Bradley, 5 Abb. Pr. 141 ; Hillyer v. Rosenberg, 11 Abb. Pr. N. S. 402. The amendment to this section settles the law in accordance with Bichmond v. Praim, supra. The affidavit may be made before any officer competent to take an affidavit, and must be made on the day of the presentation of the petitioo, though not necessarily at the time and place of presentation.. The affidavit is a prerequisite to jurisdiction of the case, and without it the court cannot proceed to grant a discharge. Bully- more V. Cooper, supra / Browne v. Bradley, supra. Where the judgment creditor appears generally in the proceed- ing, and raises no objection to the ground that the affidavit was not verified on the day of the presentation of the petition, he cannot successfully contest the sufficiency of the discharge in an action brought against the sheriff for an alleged escape. Shaffer v. Biseley, 114 N. T. 23 ; rev'g 51 Supm. Ct. (44 Hun) 6. § 88. Notice to creditors.— (Code 0. P. § 2205.) At least fourteen days before the petition is presented, the peti- tioner must serve, upon the creditor in each execution, by virtue of which he is imprisoned, a copy of the peti- tion, and of the schedule ; together with a written notice of the time when, and place where, they will be present- ed. If, by reason of changes occurring after the service, it is necessary, before presenting the petition and schedule, to correct any statement contained in the schedule, the 94 THE rOURTEEN DAYS' ACT. [cH. VI. correction may be made by a supplemental schedule, a copy of which need not be served, unless the court so directs. 2 E. S. 31, § 3, ill part ; 3 R. S. 6th ed. 25, § 3 ; 2 Edm. St. 32. § 89. Mode of service— Publication.— (Code C. P. § 3206.) The j)apers, specified in the last section, may be served, either upon the creditor or his representative, or upon the attorney whose name is subscribed to the execution ; and, in either case, in the manner prescribed in this act for the service of a paper upon an attorney, in an action in the Supreme Court. Where it is made to appear, by affidavit, to the satisfaction of the court, that service cannot, with due diligence, be so made within the State, upon either, the court may make an order, prescribing the mode of service, or directing the publication of a notice in lieu of service, in such manner and for such a length of time, as it thinks proper ; and thereupon, it may direct an adjournment of the hearing to such a time as it thinks proper. 3 E. S. 31, § 3, in part ; 3 E. S. 6th ed. 25, § 3 ; 2 Edm. St. 32. The notice required under this article is entirely different from that required by the previous articles. In the former articles notice was required to be given to all the creditors ; here the proceeding is wholly between the debtor and the execution creditoi"s. Service of the notice on the attorney, when the plaintiff resided out of the State, was sufficient, before the statute. Bates v, Williams, 1 Johns. Cas. 30. And, since the notice is entirely for the plaintiff's benefit, he may waive it, or take short notice, by consent. Rart v. Dubois, 20 Wend. 236. § 90. Service when the State is a creditor,— (Code C. P. § 2207.) Where the State is a creditor, the papers must be §§91,92.] PROCEEDINGS, WHEN " JUST AND FAIR." 95 served upon the attorney general, who must represent the State in the proceedings. 2 R. S. 39, § 30 ; 3 R. S. 6th ed. 32, § 30 ; 2 Edm. St. 40. § 91. Proceedings on return of petition. — (Code 0. P. §2308.) Upon the presentation of" the petition, schedule, and affidavit, with due proof of service or publication, as prescribed in the last three sections, the court must make an order, directing the petitioner to be brought before it, on a day designated therein ; and on that day, or on such other days as it appoints, the court must, in a summary way, hear the allegations and proofs of the parties. If the court is satisfied that the petition and schedule are correct, and that the petitioner's proceedings are just and fair, it must make an order, directing the petitioner to execute, to one or more trustees, designated in the order, an assignment of all his property, not ex- pressly exempt by law from levy and sale by virtue of an execution ; or of so much thereof as is sufficient to satisfy the execution or executions, by virtue of which he is imprisoned. 2 R. S. 32, § e ; 3 R. S. 26, § 6 ; 2 Edm. St. 32. § 92. Proceedings, when "just and fair."— Before the court can order an assignment it must be satisfied of two things : first, that the petition and schedule of the applicant are correct, and second, that his proceedings are " just and fair." Considerable discussion has arisen as to the proper construction to be placed upon the words of the statute. The affidavit which the petitioner is required to make by § 2204 is a part of the proceedings, and unless that is true his proceedings cannot be said to be just and fair. By that affidavit he is required to show not only that his petition and schedule are correct, but also that he has not at any time or in any man- ner disposed of or made over any part of his property with a 96 THE FOURTEEN DATS' ACT. [cH. TI. view to the future benefit of himself or family, or with the in- tent to injure or defraud any of his creditors. Hence, wherever it appears that a debtor has disposed of his property with the intent to defraud existing creditors, he cannot obtain a discharge. Matter of Brady, 69 N. Y. 215 ; affi'g 15 Supm. Ct. (8 Hun), 437 ; Coffin x. Oourlay, 27 Supm. Ct. (20 Hun), 308. In the cases just cited, the fraudulent disposition of property, which was held to bar the discharge, furnished likewise the ground of arrest upon which tlie debtor was held in execution. But any disposition of the defendant's property which is intended to de- fraud existing creditors, whether made before or after the action in which the arrest is made, will also bar a discharge. Matter of Watson, 2 E. D. Smith, 429 ; Gaul v. Clark, 1 Wkly. Dig. 209 ; People v. White, 14 How. Pr. 498 ; Matter of Finch, 59 How. Pr. 145 ; Hughes v. Tayhr, 1 Mon. L. B. 23 ; Barchv. Senn, Daily Keg., May 31, 1883, p. 1028. That such a disposition of property should operate to bar a discharge, there must have been an intent to defraud existing creditors, of whom the creditor contesting the discharge must have been one. A fraud committed years before upon a class of creditors whose claims have been paid or have ceased to exist, will not prevent a dis- charge, and a creditor cannot contest the discharge, on the ground of a fraudulent disposition of property, who is in no way injured or defrauded. Matter of Pearce, 38 Supm. Ct. (29 Hun), 270. It is clear, therefore, that a debtor who has made any disposi- tion of his property with the intent to injure and defraud his creditors, and which has that effect, will prevent a discharge. There are, however, other frauds, which may be practised by debtors, working great injury to creditors, though not effected by means of fraudulent conveyances, and the question has arisen how far these frauds will prevent a discharge. Thus, where the debtor has fraudulently obtained the property of his creditor and has wasted or spent it so that he is unable to account for it, can it be said that his proceedings are " just and fair" ? This ques- tion was answered in the negative in the Matter of Roberts, 59 How. Pr. 136 (Sp. T. Com. Pleas, J. F. Daly, J.) ; s. o. 8 Daly, 95, and in Matter of Finch, 59 How. Pr. 145 (Sp. T. Sup. Ct., Yan Vorst, J.) ; Matter of Tomhins, 3 Law Bui. 8 ; but in the case of Suydam v. Belhnap, 27 Supm. Ct. (20 Hun), § 92.J PROCEEDINGS, WHEW ''jTJST AND FAIR." 97 87, where judgment was obtained against the defendant for the conversion of property in a fiduciary capacity, on an application for a discharge under this article, the Supreme Court at general term said : " This case is distinguishable from that of In re Brady, (69 N. Y. 215) because the charge is that the defendant received money in a fiduciary capacity for which he has not accounted. The defendant, Brady {In re Brady, supra), was charged with a. disposition of his property with the intention of defrauding his creditors, and for that reason it was held that his proceedings were not just and fair. This case does not show any appropria- tion of this kind, and therefore that he has property attainable by recourse to his grantee, or otherwise. The money received was disposed of by him, and though improperly used does not subject him to the rule established by the case referred to." And in the Matter of Fowler, 59 How. Pr. 148 ; s. c. 8 Daly, 648 (General Term of the Common Pleas), in a carefully written opinion of Daly, Ch. J., the construction of the statute by that court is declared to be " that what is required is, that the pro- ceedings of the debtor have been just and fair in respect to the matters that he is required to swear to«i the affidavit upon pre- senting his petition ; that they relate to the inquiry whether he has made any such disposition of his property as in the affidavit he is obliged to swear that he has not ; . . . and that any dis- position by the debtor of his property made with the intent to de- fraud existing creditors, was what the affidavit meant." (8 Daly, 556, 557.) The cases of Suydam v. Belknap, supra, and Matter of Fowler, supra, must bo regarded as overruling Matter of Roberts and Matter of Finch, supra, and as establishing the doctrine that the court will be satisfied that the debtor's proceedings are just and fair when it appears that the matters required to be sworn to in § 2204 are in fact true, and that consequently if his petition and account are just and true, and he has not disposed of or made over any of his property not exempt, for the future benefit of himself and family, and has not disposed of or made over any part of his property with intent to injure or defraud any of his creditors, he will be entitled to his discharge, no matter how great or injurious to creditors may have been the frauds of which the debtor may have been guilty. Sparks v. 7 98 THE FOURTEEN DATS' ACT. [cH. VI. Andrews, 7 Weekly Dig. 276 ; s. c. 1 City Ct. K. 76 (Marine Ct., McAdam, J.). A judgment that a tirm of which the petitioner is a member lias been guilty of a fraudulent disposition of property does not preclude the discharge of the petitioner when the evidence fails to show that he participated in the fraud. Matter of Benson, 60 How. Pr. 314 ; s. o. 10 Daly, 166 ; see s. c. at Special Term, 1 Am. Insol. R. 301. When the debtor is arrested in an action, tlie complaint in which alleges fraudulent representations which are proved upon the trial, the judgment furnishes evidence that the defendant's proceedings have not been just and fair. Price V. Orautt, Daily Reg., May 26, 1884, p. 1012. See In re Z^it2, 12 Civ. Pro. 423. In the Matter of Watson, 2 E. D. Smith, 429, it was held, by a majority of the judges at general term, that the debtors had disposed of their property with the intent to injure and defraud their creditors within the meaning of the statute, when, being insolvent, they converted their prop- erty into cash and removed it from the State and wasted it in profuse expenses, gambling and adventures. Where the defendant was under arrest on execution on judg- ment obtained in an action for slander, and after the cause of action arose he conveyed his house and lot to his son in the ab- sence of evidence that the defendant knew that he was to be sued, it was held that the conveyance so made could not be said to have been made with a view to the future benefit of the de- fendant or his family, or with the intent to injure or defraud any of his creditors. Hughes v. Taylor, 1 Law Bui. 23. In the Matter of Watson, supra, it was contended that the fraudulent disposition of property contemplated by the act is a disposition made by the debtor between his arrest and his ex- amination, and that if he disposed of his property fraudulently before any proceedings were instituted against him, that would be no bar to his discharge ; but this view of the statute was not then, and has not been at any time, accepted by the courts. Matter of Boberts, 59 How. Pr. 136, 139 ; In re Brady, 69 N. Y. 215 ; 15 Supm. Ct. (8 Hun), 437 ; Matter of Brown, 46 Supm. Ct. (39 Hun) 27. In the Matter of Haight, 11 Civ. Pro. R. 227, it was held that only existing creditors could object to a discharge on the §92. J PROCEEDINGS, WHEN " JUST AND EAIR." 99 ground of a fraudulent disposition of property. It was also held that where a debtor had received a sum of money which he had expended in paying expenses of travel and living, incurred in attempts to keep beyond the jurisdiction of the court, that was such a wrongful disposition of his property as would prevent a discharge. In the Matter of Lowell, 8 Civ. Pro. E. 5 ; s. c. 13 Daly, 306, it was held that a judgment debtor who had fraudulently obtained property, and used it in the support of himself and family, knowing that the creditor must be the loser, had dis- posed of the property with intent to delay and defraud that cred- itor, and nmst be refused a discharge. It was also held in that case, that when the debtor, after incurring the liability which was the ground of his assignment, had invested a large sum in real estate in his wife's name, claiming that the investment was made in satisfaction of a prior indebtedness to her, that such in- vestment was made " for the future benefit of himself and his family." When the petitioner, just before executing a general assign- ment, withdrew a sum of money and applied it to his own use, with the design that it should not come to the. assignee under the assignment, it was held that his conduct was such as to show that his proceedings were not just and fair within the meaning of this Act. In re Howes, 9 Civ. Pro. E. 17. In the Matter of Donoghue, 17 Abb. N. C. 277 (N. Y. Com. Pleas), it is said that the question how far a debtor on the limits, who earns a comfortable salary, is bound in justice and fairness to apply it to the payment of the execution debt on which he is imprisoned, depends upon the claims of his family upon him for support, and it seems that if he spends more than in the judg- ment of the court is proper for that purpose, that will be an un- lawful disposition of his property which will defeat an applica- tion for discharge. In.the Matter of Brown, 46 Supm. Ct. (39 Hun), 27, 29, it is said : " In order to prevent a discharge, it is necessary that the transaction alleged to be fraudulent should have injured or de- frauded the creditor contesting the discharge {Matter of Brady, 69 IS'. T. 215) ; but if that be the case, we conceive it is imma- terial whether such transaction preceded or followed the recovery 100 THE FOURTEEN DATS' ACT. [CH. TI. of judgment by sucli creditor, or even the inception of the cause of action on which such judgment was obtained. In the Matter of Caamano, 8 Civ. Pro. R. 29 ; s. c. 2 How. Pr. N. S. 240, where the debtor converted to his own use a large sum of money which had been intrusted to him, and after- ward, under a power of attorney, obtained other moneys of his creditor which he also converted, it was held that under the authority of Suydam v. Belknap, 27 Supm. Ct. (20 Hun), 87, the debtor was entitled to his discharge. It seems that the burden of proof to show that the petitioner's proceedings have not been just and fair is on the objecting cred- itor. Matter of Brown, 46 Supm. Ct. (39 Hun), 27 ; In re Caamano, 8 Civ. Pro. R. 29 ; s. o. 2 How. Pr. N". S. 240. In re Boyce, 19 Civ. Pro. 23, where it appeared that the debtor had no property not exempt from execution, and that his petition and schedules were correct, it was nevertheless held that his proceedings were not just and fair under the particular circumstances. It appeared that the debtor's wife M'as the owner of two farms upon which he worked, and that he had made no efforts to obtain any compensation for his services, or to pay the judgment, which was for a small sum. It was there said (p. 26) : " A court ought not to say that a judgment-debtor's pro- ceedings for his discharge are just and fair towards the judgment- creditor so long as he refuses to make use of his credit or other resources within his influence or control to liberate himself from jail or from the jail limits." The disposition of property contemplated by the act does not include an assignment made in bankruptcy proceedings taken by the debtor before the recovery of judgment upon which he was arrested. Matter of Fowler, 59 How. Pr. 148 ; Boswog v. Seymour, 7 Robt. 427. Such an assignment is not a disposition of property for the future benefit of himself or family, or to defraud creditors, for whatever property he possesses under such a proceeding goes to his creditors. Daly, Ch. J. , in Matter of Fowler, supra, p. 154. For the same reason, the fact that the judgment-debtor has made a general assignment of all his prop- erty for the benefit of creditors, is no bar to his discharge under this article. Matter of King, 1 Am. Insol. R. 351. Bat in the case of People v. Brooks, 40 How. Pr. 165, where the debtor §§ 93, 94.] PROCEEDINGS ON ADJOURNED DATS. 101 after imprisonment filed a voluntary petition in bankruptcy, and by virtue thereof assigned all his property to an assignee in bank- ruptcy, and then filed his petition for a discharge under this act, it was held that such a disposition of his property was a fraud upon the act, and was a ground for refusing a discharge. See also Spear v. Wwrdell, 1 N. Y. 1*4 ; Hall v. Kellogg, 12 N. Y. 325. And a similar ruling was made in the Matter of Fitzgerald (Sp. T. Com. Pleas), 5 Abb. N. C. 357. See also Cornvng v. White, 2 Paige, 567. In Diedkerhoff v. Ahlborn, 2 Abb. N. C. 372, 377, where after imprisonment, at the suit of the judgment- creditor, the debtor was thrown into bankruptcy by the other creditors, the adjudication in bankruptcy was voluntarily annulled to allow the debtor to apply for his discharge under this act. § 93. Adjournments.— (Code C. P. § 2309.) Upon sufficient cause being shown by a creditor, the court may, from time to time, adjourn the hearing; but not to a day later than three months after the presentation of the petition. 2 E. S. 32, § 7 ; 3 R. S. 6th ed. 26, § 7 ; 2 Edm. St. 33 ; amended. The Revised Statutes provided that no adjournment should be made extending beyond the next term. When the defendant failed to appear upon the adjourned day, and the proceedings were dismissed with leave to come in on terms, and a motion was made to open the default, it was held that the failure to have a day assigned at the adjourned day, dis- continued the proceedings, and the court ceased to have jurisdic- tion. Bylandt v. CmnstocJe, 25 How. Pr. 429. So, when the proceedings were not adjourned to the next term, the adjournment of the court without day put an end to them. People v. Brooks, 40 How. Pr. 165. § 94. Proceedings on adjourned days.— (Code C. P. § 2210.) An objection to a matter of form shall not be received upon an adjourned day ; and, unless the opposing cred- itor satisfies the court that the proceedings on the part of the petitioner are not just and fair, the court must 102 THE FOUKTEEN DAYS' ACT. [CH. VI. direct an assignment, as prescribed in the last section but one, and must grant a discharge, as prescribed in the following sections of this article. 2 R. S. 32, § 8 ; 3 E. S. 6tli ed. 26, § 8 ; 2 Edm. St. 33. § 95. Assignment, effect thereof.— (Code C. P. § 2311.) The assignment must be acknowledged or proved, and certi- fied, in like manner as a deed to be recorded in the coun- ty, and must be recorded in the clerk's office of the coun- ty where the petitioner is imprisoned. Where it appears, from the schedule or otherwise, that real property will pass thereby, the assignment must also be recorded as a deed, in the proper office for recording deeds, of each county where the reai property is situated. The assign- ment vests in the trustee or trustees, for the benefit of the judgment-creditors in the executions, by virtue of which the petitioner is imprisoned, all the estate, right, title, and interest of the petitioner in and to the property, so directed to be assigned. 2 E. S. 32, § 9 ; 3 R. S. 6tli ed. 26, § 9 ; 2 Edm. St. 33. By § 2208 the assignment, ordered to be, must be of all the petitioner's property not expressly exempt by law from levy and sale by virtue of an execution, or of so much thereof aa is suffi- cient to satisfy the execution or executions by virtue of which he is imprisoned. The assignment ordered and made must include all property ■which the debtor has at the time when the same is ordered and made, and not merely such as he had at the time of signing his petition. Borthvnch v. Hoioe, 34 Supm. Ct. (27 Hun), 505. § 96. Discharge, when to be granted.— -(Code C. P. § 2312.) Upon the production, by the petitioner, of satisfactory evidence, that the petitioner has actually delivered to the trustee or trustees all the property so dii-ected to be assigned, which is capable of delivery ; or upon the peti- § 96.] DISCHARGE, WHEN GRANTED. 103 tioner's giving security, approved by the court, for the future delivery thereof; the court must make an order, discharging the petitioner from imprisonment, by virtue of each execution, specified in his petition. The sheriff, upon being served with a certified copy of the order, must discharge the petitioner as directed therein, with- out any detention on account of fees. 2 K. S. 32, §§ 10, 11 ; 3 E. S. 6th ed. 26, §§ 10, 11 ; 3 Edtn. St. 33. Some evidence must be furnished to the court of the actual delivery of the property directed to be assigned, before the order for discharge can be made. Borthwick v. Howe, 34 Supm. Ct. (27 Hun), 505. The affidavit of the assignee, that the property of the debtor has been delivered to him, amounts to a certificate of that fact, and is sufiicient. In re Yon Schoening, 1 Mon. L. B. 4. The design of this section is to leave it to the sound discretion of the court whether to require any security, and if any, then to fix the form of the security, and the amount, according to the circumstances of each particular case. Roswog v. Seymour, 7 Eobt. 427. No recitals are necessary to the validity of the order. It is valid if the facts exist which make it so, notwithstanding they are not recited in it. But that the order of itself should constitute a protection to the sheriff in discharging the prisoner, and that it should be prima facie evidence of the regularity of the pro- ceedings upon which the discharge is granted, it should contain recitals of the facts, giving general and special jurisdiction. Bullymore v. Cooper, 46 W". Y. 236 ; afli'g 2 Lans. 71 ; Beve- lin V. Cooper, 84 N. Y. 410. If the order is relied upon with- out proof aliunde of the facts needful to jurisdiction, there must be in it ample allegations thereof. Bullymore v. Cooper, supra ; see Bennett v. Burch, 1 Denio, 141. See ante, p. 49. The sheriff sued in action for an escape may set up that the action was not one in which a body execution could lawfully be issued. Goodwin v. Orijfis, 88 N. Y. 629. The sheriff is not liable to an action for false imprisonment 104 THE FOURTEEN DATS' ACT. [cH. VI. for refusing to discharge from his custody an imprisoned debtor upon an order for such discharge, which upon its face does not appear to be an order made by the court. Hayes v. Howe, 12 Daly, 193. In Shaffer v. Riseley, 114 N. Y. 23 ; rev'g 51 Supm. Ct. (44 Hun), 6, where tha proceeding was irregular for the reason tliat the petitioner's affidavit was not verified on the day the petition was presented, it was held in an action against the sheriff for an escape, that the irregularity was waived by the general appearance of the judgment-creditor. § 97. Petitioner's property still liable.— (Code 0. P. § 2213.) Notwithstanding such a discharge, the judgment-creditor in the execution has the same remedies, against the pi'operty of the petitioner, for any sum due upon his judgment, which he had before the execution was issued ; but the petitioner shall not, except as is otherwise spe cially prescribed in the next section, be again imprisoned by virtue of an execution upon the same judgment, or arrested in an action thereupon. 2 R. S. 33, § 12 ; 3 R. S. 6th ed. 26, § 12 ; 2 Edm. St. 33. § 98. When a creditor may issue new execution against person.— (Code C. P. § 2214.) If the petitioner is convicted of perjury, committed in any of the proceedings upon his petition, any judgment-creditor, by virtue of whose ex- ecution he was imprisoned, may issue a new execution against his person. 2 R. S. 33, § 13 ; 3 R. S. 6th ed. 27, § 13 ; 2 Edm. St. 33. § 99. Powers and duties of trustee.— (Code C. P. § 2215.) The trustee must collect the demands, and sell the other property assigned to him. He must apply the proceeds thereof, after deducting his commissions and expenses allowed by law, as follows : §§ 100, 101. J creditok's notice to debtor to apply. 105 1. To the payment of the jail fees, upon the impris- onment and dischaige of the petitioner. 2. If any surplus remains, to the payment of the cred- itors, by virtue of whose executions the petitioner was imprisoned, when he presented his petition ; or, if there is not enough to pay them in full, to the payment, to each, of a proportionate part of the sum due upon his execution. 3. If any surplus remains, he must pay it over to the petitioner, or his executor or administrator. Personal service upon a creditor, or his attorney, of written notice of the time and place of making a distri- V^ution, as prescribed in subdivision second of this sec- tion, has the same effect as publishing a notice thereof, in a case prescribed by law. 2. R. S. 33, § 15 ; 3 E. S. 6th ed. 2Y, § 15 ; 2 Edm. St. 34. § 100. Creditor may notify debtor to apply for discharge. — (Code C. P. § 2216.) Where a person has been im- prisoned, by virtue of an execution, for the space of three months after he was entitled, by the provisions of this article, to apply for a discharge; and has neither made such an application, nor applied for his discharge under the provisions of article first of this title; the judgment creditor, by virtue of whose execution he is imprisoned, may serve upon the prisoner a written notice, requiring him to apply iot his discharge, accord- ing to the provisions of this article. 2 R. S. 33, § 16 ; 3 R. S. 6tL. ed. 27, § 16 ; 2 Edm. St. 34. § lOi. Effect of failure so to apply.— (Code C. P. § 2217.) If the prisoner does not, within thirty days after personal service, of such a notice, either present a petition to the proper court, as prescribed in article first of this title, or 106 THE FOURTEEN DAYS* ACT. [cu. VI. serve, upon the creditor giving the notice, a copy of a petition and schedule, with a notice of his intention to apply for his discharge, as prescribed in this article ; or if, after such a presentation or service, he does not dili- gently proceed thereupon to a decision, he shall be for- ever barred from obtaining his discharge under the pro- visions of this article, or of article first of this title. 2 E. S. 34, § 17 ; 3 R. S. 6th ed. 27, § 17 ; 2 Edm. St. 34, as it stood prior to Laws of 1857, c. 427. § 102. Debtors to United States, etc., not to be discharged. —(Code C. P. § 2218.) Neither of the following named per- sons shall be discharged from imprisonment, under the provisions of this article : 1. A person owing a debt or duty to the United States, 2. A person owing a debt or duty to the State, for taxes or for money received or collected by any person, as a public officer or in a fiduciary capacity, or a cause of action specified in section 1969 of this act or a judg- ment recovered upon such a cause of action. 2 R. S. 39, §§ 29, 30 ; 3 E. S. 6tli ed. 32, §§ 29, 30 ; 2 Edm. St. 40, as amended by Laws of 1859, c. 2. § 103. Appeal. — The review of the proceedings, under this article, is by appeal under §§ 1356 and 1357. In re Brady, 69 N. Y. 215. An adjudication upon the merits, that the peti- tioner is not entitled to a discharge under this article, is a bar to any subsequent application for a discharge. Matter of Thomas, 10 Abb. Pr. N. S. 114 ; MatUr of Rolerts, 17 Supm. Ct. (10 Hun), 253 ; reversed ou other grounds, 70 JS". Y. 5 ; Matter of Rosenberg, 10 Abb. Pr. K. S. 450. See ante, p. 72. The intent with which the petitioner disposed of his property, is an inference of fact to be drawn from the evidence by the court below, and the Court of Appeals has no jurisdiction § 103.J APPEAL. 107 to interfere with such determination. Matter of Sedgwick,, 12 Weekly Dig. 270, s. c. sub. nom. Matter of S., 85 N. Y. 630. In the Matter of Roberts, 59 How. Pr. 136, where the debtor had applied for exoneration from arrest under what is now arti- cle two of this title, and his application was denied upon the ground that he had made conveyances of his property with the intent to defraud his creditors, it was held that tliat adjudication was a bar to a subsequent application for a discharge under this article. PART III. GENERAL ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. CHAPTER VII. DEFINED AND DISTINGUISHED.— THE ASSIGNMENT LAWS. § 104. In general. — The instruments which we are about to consider differ from the aasignrnents referred to in the various statutory proceedings heretofore considered. They are not the creature of the statute.' Thompson v. JRamwater, 49 Fed. K. 406. They come into being not by operation of law, nor by force of any previous proceeding either by or against the debtor. ' In Mills V. Parkhurst, 126 N. If. 89, 94, where the queslion was whether a creditor who attacked an assignment had made such an election of rights as would preclude him from afterward coming in to share under the assign- ment. Gray, J., said : " The assignment is not like a gift of property upon conditions, open to the acceptance or rejection of the donee. It is a payment by the assignor of his debts upon his own plan. The deed of assignment is in no sense a contract between the debtor and his creditors and it does not depend for its validity in law upon their assent. It is a means or mode which the statute permits to be adopted by an insolvent debtor, for the dis- tribution of his estate among his creditors, and so long as he has acted with- out fraud, in fact or in law, and has complied with the prescriptions of the act, his conveyance to an assignee for the purposes stated therein, will stand and be eBEective." An assignment, whether it may properly be termed a contract between the debtor and his creditors or not, is a grant by the debtor to his assignee resting on contractual obligations. The law imposes no duty upon a failing debtor to make a general assignment. It is a matter of his own volition. Sanger v. Flow, 48 Fed.- R. 152, 156 ; Baer v. Books, 50 Fed. R. 898, 901. Nor, on the other hand, does the statute " permit" the making of an assignment. The effect of the statute is to prohibit the making of an assignment in a mode different from that which the statute makes mandatory, but the riglit to assign is not derived from the statute. See post, % 108.j 110 GENERAL ASSIGNMENTS. [CH. VII. They are purely the voluntary act of the debtor. It is true that the manner of executing such instruments is now regulated by statute in this State, and to a certain extent a method for ad- ministering the trust created by them, apart from the ordinary processes of a court of equity, has been created ; but the right to make an assignment for creditors is derived in no sense from the statute, nor does the statute restrict or limit the operation or effect of such instruments wlien made. The statute " recognizes the existence of the power in the citizen to make an assignment of his property to trustees, for the benefit of his creditors, and does no more than prescribe the mode in which the power shall be used, and furnish some safeguards against abuse." Thrasher v. Bentley, 1 Abb. IS". (). 39, 44, Folger, J. Its object and pur- pose was to render more efiicient and certain the execution of the design for which the common law permitted such assign- ments to be made. People v. Ghahners, 8 Supm. Ct. (1 Hun), 683, 686, Daniels, J.; affi'd 60 N. Y. 154. " The policy of this legislation," says Abbott, referee in Lud- ington's Petition, 5 Abb. IST. C. 307, 313, " has been, not to embarrass the right of making such assignments, but to secure publicity, by acknowledgment and record, and to subject the assignors and their estates, from the time of the making of the assignment, to the summary jurisdiction of the court ; to require tiie assignee to give security promptly, as a condition of his power to convert and apply assets under it ; to authorize the assignee to gain possession of all the assets, by compelling the debtors to make discovery, if they fail to make a schedule of assets ; and to authorize the assignee to ascertain who claim as creditors, by ad- vertising for claims and requiring verified vouchers ; lastly, to provide a simple and direct method of accounting, modeled upon that provided for executors and administrators." § 105. Definition of assignment. — A general assignment for the benefit of creditors is a transfer by a debtor of his general property to a person, in trust to pay his creditors. The essential elements of such instruments are : (1) a voluntary conveyance of the debtor's property, (2) in trust, (3) to sell the assigned proper- ty, and (4) to distribute the proceeds among the creditors. See Ginther v. Richmond, 25 Supm. Ot. (18 Hun), 232. The in- strument is, therefore, simply a deed of trust, and differs from § 105.] DEFINITION OP ASSIGNMENT. Ill other deeds of the same general character in the peculiarities of the trust created. These peculiarities are as stated. (1) There must be an actual transfer of the title to the prop- erty. A mere power of attorney to collect debts, and apply tlie proceeds to the payment of the claims of creditors does not amount to an assignment for the benefit of creditors. Beans v. Bullitt, 57 Penn. St. 221 ; Henderson's Appeal, 31 Id. 502 ; Griffin V. Rogers, 38 Id. 382 ; Banning v. Sibley, 3 Minn. 389. To come within the definition of a general assignment, the conveyance must be voluntary. Where a valuable consideration is shown for the transfer, the conveyance is not a general assign- ment. Lewis V. Miller, 23 Wkly. Dig. 495. The conveyance, especially as now regulated by statute in this State, must be of the body of the debtor's property. A specific conveyance of a part of the debtor's property for the benefit of specified creditors is not within the contemplation of the statute regulating general assignments. In Tiemeyer v. Turnquist, 85 N. Y. 516, an action was brought by the plaintifE as assignee to recover from the defend- ant for goods sold by the assignor ; the assignment under wliich the plaintiff claimed purported to transfer ail the assignor's books, debts, and book accounts to the plaintiff, who was to apply the proceeds to the payment of two small debts, the bal- ance to go to the assignor's wife. The defendant contended that the assignment was void because not executed with the for- malities required by the general assignment act. This conten- tion was not sustained. The court said, speaking of the assign- ment (p. 523) : " It does not profess to transfer all the assignor's property, nor to provide for all his debts, but only to transfer a part for a specified purpose. While certainly not good as a general assignment, it is nevertheless operative as between the parties, no rights of creditors intervening, to transfer the claim against the defendant to the plaintiff." In Knapp v. McGowan, 96 X. Y. 75, it was said that the general assignment acts have reference only to general assignments made by insolvent debtors for the benefit of all their creditors, and it was remarked that the vari- ous provisions of those statutes are entirely inapplicable to the case of a partial assignment of a portion of the debtor's property for the benefit of specified creditors. So in Royer Wheel Co. v. 112 GENEEAL ASSIGNMENTS. [cH. VII. Fielding, 101 N. Y. 504, it was held that the general assign- ment act does not relate to a specific assignment for the benefit of one or a limited number of creditors. And to the same effect is Eoyer Wheel Co. v. Frost, 13 Daly, 233 ; Matter of Gordon, 56 Supm. Ct. (49 Hun), 370. On the subject of special assign- ments see post, §§ 140, 141, and 142 and §§ 160a, 160J. (2) There must be a trust and a trustee and creditors, cestuis que trust, who can compel an enforcement of the trust. Dick- son v^. Rawaon, 5 Ohio St. 218 ; Lucas v. The Sunhury c& Erie R. R. Co. 32 Penn. St. 458. The material and essential char- acteristic of a general assignment is the presence of a trust. The assignee is merely trustee and not absolute owner. He buys nothing and pays nothing, but takes the title for the performance of trust duties. Finch, J., Brown v. Guthrie, 110 N. Y. 435, 441 ; rev'g 46 Supm. Ct. (39 Hun), 29 ; Maas v. Fall, 54 State R. 160. In Hine v. Rome, 53 Supm. Ct. (46 Hun), 196 ; affi'd 114 N. Y. 350 ; s. c. 22 Abb. K. C, 333, n., debtors made an absolute bill of sale of their property to a creditor, and in return took back from him an agreement, that in considera- tion of the transfer he would discharge an indebtedness due to him, and would also pay certain specified debts of the debtor, and such other claims as the debtors might direct him to pay, not exceeding a specified sum. It was held that this transaction did not constitute a general assignment for tiie benefit of creditors. Tliere was no element of trust. The covenant to pay the speci- fied claims was a part of the consideration for the absolute pur- chase of the property. See Lehman v. Bentley, 60 Super. Ct. (28 J. & S.) 473. (3) The trust must be to convert the estate into money. This is the only trust in real estate for the benefit of creditors author- ized by law.' 1 R. S. 7:29, § 56. A power to sell and convey ' Trusts for the benefit of creditors were recognized and enforced in tliis State previous to the Revised Statutes. Nicoll v. Mumford, 4 Johns. Ch. 523, 529 ; Orover v. Wakeman, 11 Wend. 187. The revisers limited the creation of express trusts in land to the cases only " where the purpose of the trust require that the legal estate should pass to the trustees. An assignment for the benefit of creditors, would in most cases be entirely defeated, if the title were to remain in the debtor." Reviser's note to Sec. 56, Art. 1, Title 1, Chap. 1 of Part 2 of Rev. Stat. (5 Edm. St. 580.) § 106.J DISTINGUISHED FROM MOUTGAGES. 113 is necessarily implied by a conveyance of property to pay debts. Planch V. Schermerhorn, 3 Barb. Cii. 644: ; Cooper v. Whitney, 3 Hill, 95, 101 ; Williams v. Otey, 8 Humph. (Tenn.) 563. (4) The trustee must be authorized to distribute. Hooper v. Tuckerman, 3 Sandf. 311, 316. § io6. Distinguished from mortgages— The instruments to which general assignments for the benefit of creditors bear the closest analogy are mortgages and deeds of trust in the nature of mortgagee. The distinction, however, is one clearly defined. A mortgage or deed of trust in the nature of a mortgage is a security for debt. An assignment is more than that. It is an absolute appropriation of property to tlie payment of debts. Murray v. Judson, 9 N. Y. 73, 83, Gardiner, J.; Hoffman v. Machall, 5 Ohio St. 124. A mortgage creates a lien upon property in favor of the cred- itor, leaving the equity of redemption still the property of the debtor, and liable to sale or incumbrance by him. Leitch v. Hollister, 4 IST. Y. 211 ; Dunham v. Whitehead, 21 N. Y. 131 ; McClelland v. Hemsen, 3 Abb. Dec. 74 ; Van Buskirk v. Warren, 4 Id. 457 ; Loeschigk v. Baldwin, 1 Robt. 377 ; Af polos V. Brady, 49 Fed. R. 401, 403. An assignment conveys the entire estate, legal and equitable, to the assignee ; and the assignor has no rights, legal or equita- ble, in the assigned property until the purposes of the trust are satisfied. Briggs v. Davis, 20 N. Y. 15 ; s. c. 21 N". Y. 574. There is a distinction between an assignment by a debtor of his property to trustees, upon trust for the payment of particu- lar and specific debts, reserving the surplus to the debtor, and an assignment by a debtor of his property and effects to his cred- itor, upon the trust to sell and pay his own debt, reserving the surplus to the assignor. The latter is in efi'ect a mortgage, and when the debt for which it is security is paid, the property re- verts to the original owner. MoClelland v. Remsen, 36 Barb. 622 ; s. c. 14 Abb. Pr. 331 ; affi'd 5 Abb. Pr. K. S. 250 ; Bier V. Kille, 50 Supm. Ct. (43 Hun), 174 ; Royer Wheel Co. v. Frost, 13 Daly, 233 ; Boessneck v. Cohn, 26 State R. 969 ; s. c. 7 N. Y. Supp. 620. The essential difference between a general assignment to an 8 114 GENKKAL ASSIGNMKNTS. [cH. VII. assignee in trust and a pledge, is that in one case the absolute title passes to the assignee, while in the case of a pledge the tftle remains in the pledgor, and it is the right of possession and the right to hold or apply the pledge to secure the debt that is vest- ed in the pledgee. Maas v. Falk, 54 State H. 160. Where a debtor assigns, in good faith, part of his property tu creditors themiselves, for the purpose of securing particular de- mands, reserving the surplus to himself, the assignment is not void as creating a trust for the debtor, under 2 R. S. 135, § 1. The conveyance, whatever may be its form, is in effect a mort- gage of the property transferred. A trust as to the surplus re- sults from the nature of the security, and is not the object or olie of the objects of the assignment. The residuary interest may still be reached by the creditors, who are therefore not delayed or hindered. Leitch v. HoLUster, 4 N. Y. 211 ; Brown v. Guthrie, 110 N. Y. 435 ; rev'g 46 Supm. Ct. (39 Hun), 29. " The distinction in such cases," says Welles, J., in Dunhnm V. Whitehead (21 N. Y. 131, 133), "is between a conveyance in trust, in the strict and proper sense of the term, where the trustee acquires the entire title to the subject-matter of the trust, and where the trust can only be enforced or controlled in equity, and a case where a creditor can at once proceed and sell the residuary interest or equity of redemption of the assignor, if the thing assigned be property which may be sold on execution, or, if not, where he may reach that interest by a bill or action in equity in the nature of a creditor's bill — the same as if it never had been assigned — subject only to the lien created by the assign- ment." Deeds of trust in the nature of a mortgage with power of sale are also clearly distinguished from general assignments, as known in this State. The radical distinction arises out of the equitable interest which the debtor retains in the property conveyed. See Hendriehson v. Robinson, 2 Johns. Ch. 283. § 107. Assignments directly to creditors. — General assign- ments are distinguished from conveyances directly to creditors, in the form of a sale of the property to a creditor in payment of his debt, as well as by pledge or hypothecation of the property to a particular creditor, as a security for a debt in the nature of a mortgage, as in the case just referred to. § 108. J ASSENT OF CREDITORS. 115 A conveyance may be made by a debtor of his property to all his creditors, in trust to distribute the proceeds among them, and with power to name an assignee. Tompkins v. Wheeler, 16 Pet. 106 ; Cunningham v. Freeborn, J 1 Wend. 240, 256 ; Mussey v. Noyes, 26 Yt. 462. But such conveyances are rarely if ever made. So a transfer made by a debtor to one creditor, to deduct his own claim and pay the balance to another creditor, may be in efEect a general assignment. Smith v. Woodruff, 1 Hilt. 462. It is said by Chan. Kent, in Nicoll v. Mumford (4 Johns. Ch. 522, 529), referring to Brown v. Minturn (2 Gall. 557), that if the assignment is directly to creditors, their assent is necessary in law to give validity to the deed ; but if the assignment be to trustees, for their use, the legal estate passes and vests in the trustees, and chancery will compel the execution of the trust for the benefit of the creditors, though they be not at the time as- senting and parties to the conveyance. As to the first of these propositions, so far as it appears to hold that proof of an express acceptance is necessary in the case of a conveyance direct to a creditor, the point was not necessary to the determination of the ease of Nicoll v. Mxtmford {supra) ; and in Van Bushirh v. Warren (4 Abb. Dec. 457, 460), Mr. Justice Potter expressed a decided opinion that, in the case of an assignment directly to a party having a direct beneficial interest in the acceptance of an assignment, the presumption is that the assignee accepts the title, and the onxts is upon the party claiming in hostility to show that there never was an acceptance. Citing Nicoll v. Mum- ford, supra, and Moir v. Brown, 14 Barb. 39, 45. § io8. Assent of creditors. — Whatever may be the rule in that class of cases, it has been held in this State, from an early time, that, in the case of conveyances to a trustee for the benefit of creditors made in good faith, and without conditions deemed injurious to their interests, the legal estate vests at once in the trustee, and the assent of creditors is presumed, unless the con- trary is proved.' Cunningham v. Freeborn, 11 Wend. 240, ' In England an assignment for creditors is regarded rather in the nature of a deed of agency than as a deed of trust {Mackinnon v. Stewart, 20 Law J. [N. 8.] Chan. 49 ; Qwrrard. v. Lauderdale, 3 Sim. 1 ; Acton v. Woodgate, a Myl. & K. 492). In the case last cited it is said : " If a debtor conveys 116 GENEEAL ASSIGNMENTS. [cH. VII. 248, 249 ; Nicoll v. Mumford, 4 Johns. Ch. 522 ; Halsey v. Whitney, 4 Mason, 206 ; TompMns v. Wheeler, 16 Pet. 106, 118 ; Ludingtmi's Petition, 5 Abb. N. C. 307. But by this, of course, it is not to be understood that there is no necessity for an acceptance on the part of the assignee. Such an acceptance is essential to the validity of the instrument, both at common law {Crosby v. Hilly er, 24 Wend. 280 ; Jackson v. Phipfs, 12 Johns. 418), and under the statute. Laws of 1877, c. 466, §§ 2, 7. § 109. The right to assign. — Assignments for the benefit of creditors are said to have been an American device (Selden, J., in Dunham v. Waterman, 17 N. Y. 9, 15), and of recent origin. (Tracy, Senator, in Graver v. Waleeman, 11 Wend. 187, 216 ; but see Bamford v. Baron, 2 Term E. 594, n., and Tappenden v. Burgess, 4 East, 230.) They are said, also, to have originated in the desire of creditors to perpetuate their own control over the property in their hands. Selden, J., in Dunham v. Water- 'tnan, supra, 16. The right to make such conveyances depends ultimately upon the absolute dominion which a person has over his property, by which he can make any disposition which he pleases of it not inconsistent with the rights of others. Ch. J. Marshall, in Brashear v. West, 7 Pet. 608, 614. An insolvent debtor, at any time before his property becomes property in trust for the benefit of his creditors, to whom the conveyance is not communicated, and the creditors are not, in any manner, privy to the con- veyance, the deed merely operates as a power to the trustees, which is revoca- ble by the debtor, and has the same effect as if the debtor had delivered money to an agent to pay liis creditors, and, before any payment made by the agent, or communication by him to the creditors, had recalled the money so delivered." The distinction in the cases between such a conveyance in trust ■for creditors and a voluntary settlement in favor of beneficiaries generally, is made apparent by a later case in the same volume (Bill v. Gureton, 3 Myl. & K. 503), where a voluntary settlement for beneficiaries generally was held to create an irrevocable trust. In Massachusetts the assent of creditors is neces- sary to render the assignment effectual as against attachment creditors. It becomes operative as to assenting creditors to the amount due to such cred- itors (May V. Wannemacher, 111 Mass. 203 ; JoTies v. l\lton, 139 Id. 418). In most of the States the assent of creditors is presumed. See Burrill on Assignments, 6th ed. § 258. §110.] EFFECT OF ASSIGNMENT. 117 bound by any lien, may assign it over to trustees for the benefit of all liis creditors. The assignment is to be referred to an act of duty, attached to his character of debtor, to make the fund available for the whole body of his creditors. Kent, Ch., Nicoll V. Mumford, 4 Johns. Ch. 522. And a debtor, in securing an equal distribution of his property among his cred- itors, is performing a moral duty. 2 Spence's Eq. Jur. 350, citing Pickstoch v. Lyster, 3 Maule & S. 371, 374. Such assignments, especially when they have been made for the equal benefit of all creditors, have uniformly received the approbation of the judicial tribunals before which they have been brought. -Field, J., in Mayer v. HeUm,an, 91 U. S. 496, 500. Story, J., in Brown v. Minturn, 2 Gall. 557, 559 ; Har- lan, J., in Eeed v. Mclntyre^ 98 U. S. 507. § 110. The effect of the assignment.— The effect of a gen- eral assignment must be determined in each instance by the terms and construction of the instrument itself. It may, how- ever, assist in the study of the subject, to state in a general way some of the necessary effects of every general assignment. It is to be constantly borne in mind that assignments for cred- itors are simply deeds of trust. They have no other efficacy or effect than can be derived from the deed of trust. When the conveyance is of all the debtor's property for the benefit of all his creditors, they amount to a complete cession of his estate for his creditors. But the surrender of the property is not a sur- render to the law for the purpose of administration by the law, like a commission or assignment in bankruptcy, but is a private • trust vesting in general only such a title in the assignee as the assignor has conveyed, and for such purposes only as the assignor has prescribed in the assignment. " The assignee derives all his power from the assignment, which is both the guide and measure of his duty. Beyond that, or outside of its terms, he is powerless and without authority. The control of the court over his actions is limited in the same way, and can only be exercised to compel his performance of the stipulated and defined trust, and protect the rights which flow from it. He distributes the proceeds of the estate placed in his care, according to the dictation and under the sole guidance of 118 GENERAL ASSIGNMENTS. [CH. VII. the assignment, and the statutory provisions merely regnlate and guard his exercise of an authority deriv^ed from the will of the assignor." Finch, J., Matter of Lewis, 81 JST. T. 421, 424. As to the assignor, therefore, after the assignment he ceases to have any legal title to the assigned property, and his equitable interest is confined to such residuum of the estate as may remain after all the debts directed to be paid have been satisfied. He remains as before, liable for all his unpaid debts, and subject to all legal process. Butler v. Thompson, 4 Abb. N. C. 290. The assigned property, however, has ceased to be the debtor's, and is placed beyond the reach of legal process against the debtor or his property. "When the assignment is valid, creditors can reach the property only in equity. As to the assignee, the legal title to the property vests in him, but the beneficial interest is in the cestuis que trust, the creditors. The assignee is seized for others, not for himself. The moment he is seized, that moment the substantial interest passes out of him unto others. He is merely the legal recipient or organ by which the conveyance is rendered operative for the purposes de- clared in it. As to the creditors provided for in the assignment, their rights become fixed by the execution of the assignment by the assignor, and its acceptance by the assignee. The assigned prop- erty becomes appropriated to the payment of their debts. Mur- ray V. Judson, 9 N. Y. 73, 83. And they may enforce the trust by all the equitable remedies which the law gives to cestuis que trust. § III. The Act of i860. — The method of making general as- signments for the benefit of creditors, and of enforcing the trusts which they create, was first regulated by statute in this State in 1860 (Laws of 1860, c. 348). That act required that the assign- ment should be made in writing, and should be acknowledged and recorded (§§ ], 6). It also required the debtor within twenty days after making the assignment, to make and deliver to the county judge of the county in which the debtor resided, an inventory or schedule precisely as required under the two- tiiirds act (see ante, p. 29). It provided, also, that the assignee should within thirty days after the date of the assignment, and § 111. J THE ACT OF 1860. 119 before he sliould have power or authority to sell, dispose of, or convert to the purposes of the trust any of the assigned prop- erty, execute a bond to the people of the State for the faithful performance of his duties (§ 3). After the lapse of a year from the date of the assignment, the county judge was empowered, upon petition of any creditor of the debtor, to issue a citation compelling the assignee to appear and show cause why he should not account, and to decree the payment of the petitioning cred- itor's proportional part of the fund. The county judge was clothed with the same power and jurisdiction to compel such accounting as is possessed by surrogates in relation to the estates of deceased persons, and with power to examine the parties to the assignment, and other persons in relation to the assignment and accounting, and to compel their attendance. The right of appeal as from the decrees of a surrogate was also given (§ 4). These, with a provision authorizing the county judge to order the prosecution of the assignee's bond, constituted the substance of the enactment. In 1867 (Laws of 1867, c. 860), the section in reference to ac- countings was amended by inserting a provision that the citation should be served upon all persons interested in the assignment, and setting forth the mode of service, and providing also for a reference to take and report the examination of the assignee, and providing for the protection of the assignee upon the ac- counting, against claims of creditors. In 1870 (Laws of 1870, c. 92), these amendments were all abrogated, and the section was restored to its original form, with the exception that the petition could be made by a surety as well as by any person interested in the estate. In 1872 (Laws of 1872, c. 838) the same section was again amended by setting out fully how the citation should be served, and providing that all laws governing surrogates on accountings should be applicable to these proceedings, and that the county judge should have all the powers of surrogates therein. The amendment authorized a reference, and provided for a transfer of the proceedings to the county judge of some adjoining county, when the county judge having original jurisdiction should be- come incapacitated, and for the continuance of the proceedings in case of the death of the assignee. 120 (iENEEAL ASSIGNMENTS. [CH. VII. Ill 1873 (Laws of 1873, e. 363), the fifth section of tlie act was amended so that, in the case of the removal of the assignee and the substitution of another assignee, the substituted assignee might prosecute the bond of his predecessor. In 1874, for the purpose of obviating the decision in the case of Juliand v. Jiathbone (39 N. T. 369), where it was held that a failure to make and deliver the inventory and schedule required by the second section had the effect to render the assignment void, it was enacted (Laws of 1874, c. 600), that in case the debtor should omit or refuse to make and deliver the inventory and schedule, the assignment should not for that reason become invalid, but the assignee was autiiorized within six months after the date of the assignment to make and file the inventory and schedule required, and to compel a discovery by the assignor for the purpose of the preparation of the inventory and schedule. This act also provided that the county judge might authorize the assignee to advertise for claims of creditors, and specified the manner in which the advertisements should be made. This act having extended the time within which the inventory and schedule might be filed for six months, left the provision requiring the assignee's bond to be filed within thirty days after the date of the assignment. Inasmuch as the inventory of prop- erty was essential to enable the court to fix the penalty of the bond, a serious inconvenience arose, and the next year (Laws of 1875, c. 56) the third section of the act was altered by changing the time, within which the assignee's bond was required to be filed, from thirty days after the date of the assignment to ten days after the delivery of the inventory or schedule. This act also amended the fourth section in reference to accountings, by restoring the section as it originally read in the act of 1860, with the addition of a clause providing for a reference to take and state the assignee's account. The various decisions under the act of 1860 and its amend- ments are to be found under the special topics to which the dif- ferent provisions of the act relate. g 112. The General Assignment Act of 1877.— The general assignment act of 1877 (Laws of 1877, c. 466) repealed the act of 1860 and all the enactments mentioned in the previous section, § 112.J THE ACT OF 1877. 121 and substituted in their stead a much more compreliensive system for the administration of the assigned estate, and the enforce- ment of the equitable interests of creditors in the trust property. It retained all the features of the act of 1860 and its amend- ments, and supplemented them by what was intended to bo a summary and complete proceeding in the county court, for the administration and distribution of the estate without resort to a court of equity. This act was amended in 1878 (Laws of 1878, c. 318), but inasmuch as each of the sections of the act as amended are cited and discussed in the following chapters, no further reference to their details is here required. In 1884 (Laws of 1884, c. 328), the act was still further amended by tlie addition of a requirement that in all assignments made under the act the wages or salaries of employees shall be preferred before any other debts, and directing that, if the assets are insufficient to pay all such claims in full that they shall be paid pro rata. In 1885 (Laws of 1885, c. 380), an act was passed to the effect that all powers, rights, and duties conferred upon county judges under the assignment act were also conferred upon and could be exercised by the Supreme Court, and the justices of the Supreme Court concurrently with the county courts and judges. See post, Chap. XVIII. In the same year (Laws of 1885, c. 464), the General Assign- ment Act was amended by modifying section twenty-three, so as to provide that the county judge might authorize the assignee to sell, as well as to compromise or compound claims or debts belonging to the estate. In 1886 (Laws of 1886, c. 283), the act of 1884, this section was amended so that § 29 should provide that " in all distribu- tions of assets under all assignments," etc., wages should be pre- ferred, as in the previous enactments. See post, § 175. In 1887 (Laws of 1887, c. 503), a new section (§ 30) was added to the act, the intention of which was to prevent preferences being made to tlie extent of more than one-third of the assigned estate. See post, Chap. XI. In 1888 (Laws of 1888, c. 294), section two of the act was amended by inserting a provision to the effect that the assign- ment must specifically state therein the residence and the kind 122 GENERAL ASSIGNMENTS. [cH. VII. of business carried on by the assignor at the time of the assign- ment, and the place at which tiie business is conducted. See post, § 125. In 1891 (Laws of 1891, c. 3-1), it was prov^ided that when it becomes necessary to appraise in whole or in part an insolvent estate in the hanjis of an assignee, the real property shall be taken at its full and true value, taking into consideration actual sales of neighboring real estate similarly situated during the year immediately preceding, and all such property as is customarily bought or sold in open market in ISTew York or elsewhere shall be valued by ascertaining the range of the market and the aver- age of prices running through a reasonable period of time. This provision was not, however, in terms of an amendment to the assignment act. In 1894 (Laws of 1894, c. 134), the twenty-second section of the act was amended by inserting a provision that a final decree directing the payment of money may be enforced by serving a certified copy thereof personally upon the assignee, and if he wilfully neglects to obey said decree by punishing him for a contempt of court. This remedy, however, does not suspend the right of action against the sureties upon the assignee's bond. CHAPTER VUT. PARTIES TO ASSIGNMENTS. § 113. In general. — ^The formal parties to an assignment are ordinarily the assignors and the assignee. Creditors are not necessary, and usually not proper, parties to the instrument (see § 113). Under the act of 1877 (Laws of J 877, c. 466, § 1), it is re- quired that " the assent of the assignee, subscribed and acknowl- edged by him, shall appeal' in writing, embraced in or at the end of or indorsed upon the assignment, before the same is recorded, and, if separate from the assignment, shall be duly acknowl- edged." § 114. Assignments, by whom made. — Any person capable in law of entering into a contract, may execute an assignment for the benefit of creditors. It was held in the case of Fox v. Heath (21 How. Pr. 384), that an assignment executed by part- ners, one of whom was an infant, was void, for the reason that the instrument, being voidable by the infant, the conveyance was not absolute and irrevocable, and was consequently fraud- ulent as to creditors. This doctrine was disapproved, however, in Totes v. Lyon (61 N. Y. 344 ; rev'g 61 Barb. 205). In that case the infant had ratified the deed after he came of age. In- dependent of that fact, it seems that an appropriation of firm property to the payment of firm debts would bind the infant partner even without his assent. See Avery v. Fisher^ 35 Supm. Ct. (28 Hun), 508. Previous to the married woman's act of 1860 (Laws of 1860, c. 90), a married woman was disabled by her coverture from making a general assignment of a stock in trade with which she was conducting business. Oropsey v. McKinney, 30 Barb. 47. !N"or did the fact that the husband assented that the business should be conducted in her name, carry with it an implied 124 GENERAL ASSIGNMENTS. [CH. vm. authority that she might make an assignment for the benefit of creditors. Oropsey v. McKinney, supra, 58. Bat the act of 1860, which provides that a married woman may bargain, sell, assign, and transfer her separate personal property, and carry on any trade or business, seems to confer the authority to make a general assignment. § 115. Assignments by non-residents. — Non-residents car- rying on business in this State who execute an assignment within the State of property situated here must comply with the State laws as to the mode and manner in which the assignment is exe- cuted. If the assignment in such a case is not executed as re- quired by our laws, it will not be held valid because executed in conformity with requirements of the law of the domicil of the non-resident parties. Smedly v. Smith, 15 Daly, 421 ; s. 0. 28 State R. 414. The general assignment act contemplates the making of assignments by non-residents within this State, and such conveyances, when executed here, must comply with that law. Grady v. Bowe, 11 Daly, 259, 271. In Ooherman v. Cross, 54 N. Y. 29, the assignment was exe- cuted in Canada by residents of that country in conformity with its laws, and it was held valid to pass title to property in this State. . A non-resident could make an assignment under the act of 1860 {Scott V. Guthrie, 10 Bosw. 408), although the pro- visions of that statute were not as clearly applicable to non- residents as those of the act of .1877. For further discussion of the questions arising under assignments executed elsewhere of property situated in this State, see Chap. XVII. § 116. Creditors, when proper parties. — It is not necessary that the creditors be parties to, or to assent to, the assignment. Cunningham v. Freehorn, 11 "Wend. 240, 248 ; see Moses v. Murgatroyd, 1 Johns. Ch. 119, 129. When the assignment is manifestly for the advantage of creditors, and contains no pro- visions prejudicial to them, their assent will be presumed, unless the contrary appeals. Nicoll v. Mumford, 4 Johns. Ch. 522,. 529, Kent, Ch. ; Brown v. Minturn, 2 Gall. 557 ; Lawrence v. Davis, 3 McL. 177 ; Fellows v. Greenleaf, 43 N. H. 421 ; Ludington's Petition, 5 Abb. N. C. 307, 312. See ante, § 106a, and note. § 117.] ASSIGNMENTS BY CORPORATIONS. 125 The legal estate will pass to and vest in the assignees, although the creditors are not at the time assenting and parties to the con- veyance. Niooll V. Mumford, supra / Halsey v. Whitney, 4 Mason, 206, 214. If the assignment is drawn with the design that it should be executed by the creditors, or expressly requires their assent or acquiescence, they must execute it or express their assent in the required manner before it will be efEeetual as to them. I^aw- rence v. Davis, supra ; Shea/rer v. Loftin, 26 Ala. 703 ; Brown V. Lyon, 17 Id. 659. When the assignment requires some act to be done which is not presumptively for the benefit of the creditor, as, for instance, where it requires the creditor to execute a release to the debtor, it will not be effectual as against the creditors, unless assented to, and in such cases the creditors would be proper parties to the instrument. Walceman v. Grover, 4 Paige, 23 ; s. c. sub. nom. Grover v. Waheman, 11 Wend. 187. The English as well as the Massachusetts doctrine in reference to the implied assent of creditors, is different. Lewin on Trusts, 9th ed. 568 ; Burrill on Assignments, 6th ed. §§ 258, 259. § 117. Assignments by corporations. — "It appears to be settled," says Chan. "Walworth, in De Buyter v. The Trustees of St. Peter's Church (3 Barb. Ch. 119, 124 ; afli'd 3 JST. T. 238), " by a weight of authority which is irresistible, that a cor- poration has the right to make an assignment in trust for its cred- itors ; and may exercise that right to the same extent, and in the same manner, as a natural person, unless restricted by its charter, or by some statutory provision." This opinion is sustained by the authorities. Ilaxtun v. Bishop, 3 Wend. 13 ; Bowery Bank Case, 5 Abb. Pr. 415 ; Bill v. Reed, 16 Barb. 280 ; Burlhut v. Carter, 21 Barb. 221 ; Nelson v. Edwards, 40 Barb. 279 ; Onion Bank v. EllicoU, 6 Gill & J. 363 ; State of Maryland v. Ba/nk of Maryland, 6 Gill & J. 205 ; Wilkin- son V. Bauerle, 41 N. J. Eq. 635 ; Town v. Ba/nk of Ri-oer Raisin, 2 Doug. (Mich.) 530 ; Robins v. Emhy, 1 Smede & M. Oh. (Miss.) 207 ; Beaston v. Farmers' Bank of Delaware, 12 Pet. 102 ; In re Conway, 4 Ark. 302 ; Ringo v. Biscoe, 13 Ark. 563 ; 2 Kent's Comm., 315 ; see Southern Law Review, 126 GENERAL ASSIGNMENTS. [CH. VIII. vol. Ill, N. S. 553 ; Burrill on Assignments, 6th ed. § 45 ; Moiawetz on Corporations, M ed. § 513. In a very recent case in this State { Vanderpoel v. Gorman, 140 N. Y. 563, 568) Judge Peckham said : " There can be no doubt that an insolvent corporation could at common law make a gen- eral assignment in trust to an assignee for the benefit of its cred- itors." But an assignment of all the property of a corporation does not operate as a transfer of the corporate franchise, nor does it work a dissolution of the company. J)e Ruyter v. The Trustees of St. Peter'' s Church, supra ; Ilurlbut v. Carter, supra ; State of Maryland v. Bank of Maryland, supra / Town v. Bank of River Raisin, supra. In Abbot V. American Hard Rubher Co. (33 Barb. 578 ; s. c. 21 How. Pr. 193), it was held that a transfer by a majority of the directors of a corporation, of the entire property of the com- pany, except its real estate, with its machinery and fixtures, which in efifect terminated the business of the company, was void as against stockholders. The transfer in that case did not pur- port to be for the benefit of creditors. (33 Barb. 584.) This case is a leading authority in this State, and is also recognized as the leading authority in most of the States. People v. Ballard, 134 N. Y. 269, 295. There is a manifest distinction between the assignment of property by an insolvent corporation in trust for the purpose of paying its debts, and the conveyance of its property- while solvent, so as to make the continued exercise of its franchises impossible. Vanderpoel v. Gorman, 140 N. Y. 563, 568. The former is merely a method of paying debts which involves, be- cause the corporation is insolvent, a winding up of its affairs ; the latter is the exercise of powers by the officers of a corpora- tion directly and primarily destructive of the purposes for which it was organized, while it still has the capacity to perform those purposes. Smith V. N. Y. Consolidated Stage Co. (18 Abb. Pr. 419) was the case of an assignment by a corporation acting under a resolution adopted by a majority of the directors, of all the corporate prop- erty to an assignee to sell, and pay creditors ^w rata, it was held that if the corporation was solvent the act of the directors was § 118.] A8SIGKM.EWTS BY CORPORATIONS. 127 ultra vires and a fraud upon the stockholders. The decision, however, seems to have gone upon the ground that the transfer was made in contemplation of insolvency, and was therefore void under the statute about to he cited. § Ii8. Statutory restrictions on assignments by corpora- tions.— Although the power of a corporation to make a general assignment was thus unlimited at common law, the statutes of this State for many years restricted the right to a very consider- able extent. These restrictions, however, have by recent legis- lation been greatly modified. In 1825 (Laws of 1825, c. 325), the legislature passed an act entitled " An act to prevent fraudulent bankruptcies by incor- porated companies," etc., and by the sixth section of that act provided : " That whenever any incorporated company shall have refused the payment of any of its notes or other evidences of debt, in specie or lawful money of the United States, it shall not be lawful for such company, or any of its ofiicers, to assign or transfer any of the property or choses in action of such com- pany, to any oSScer or stockholder of such company, directly or indirectly, for the payment of any debt ; and it shall not be lawful to make any transfer or assignment in contemplation of the insolvency of such company, to any person or persons what- ever ; and every such transfer and assignment to sucli officer, stockholder or other person, or in trust for them or their benefit, shall be utterly void." This provision was incorporated verhatim into the Revised Statutes. 1 E. S. 603, § 4 ; 2 R. S. 6th ed. 399 ; 2 R. S. 7th ed. 1534 ; 1 Edm. St. 560. A subsequent section C2 R. S. 605, § 11 ; as amended by Laws of 1871, c. 883 ; 2 R. S. 7th ed. 1536), provides that the pro- visions of the title of the Revised Statutes in which the seciion occurs, shall not apply to any religious society nor to any moneyed corporation which shall have been or shall be created, or whose charter shall be renewed or extended after January 1st, 1828, and which shall be subject to tlie provisions of the second title, of the eighteenth chapter, of the first part of the Revised Statutes. In the case of Haxtun, v. Bishop (3 Wend. 13), decided under 128 GENERAL ASSIGNMENTS. [cH. VIII. the act of 1825, aa assignment, executed after a bank had stopped payment, to persons other than officers or stockholders, in trust to apply the proceeds to the payment of all the creditors of the bank in equal proportions, was considered valid, but the case turned upon another point. See Harris v. T/iompfion, 15 Barb. 62, 65. The opinion of the court was that the assignment was not made in contemplation of insolvency within the provision of the statute. See Rolinson v. Banh of Attica, 21 N. Y. 406, 411 ; Heroy v. Kerr, 8 Bosw. 194. In Harris v. Thompson (15 Barb. 62), it was decided that an assignment made by a cor- poration in contemplation of insolvency, although it had not in fact stopped payment, was within the statute, and the assign- ment was adjudged void. This opinion was approved by the Court of Appeals in Sihell v. Remsen, 33 N. Y. 95. Both of the cases last cited were instances of assignments made by cor- porations organized under the act of 1848, for the formation of manufacturing companies. In reference to such corporations it was expressly held, under the provisions of the Hevised Statutes above cited, that a general assignment for the benefit of creditors, made by a corporation organized imder the act of 1848, when insolvent or in contem- plation of insolvency, was absolutely void. Loring v. U. S. Vulcanized Outta Percha Co. 30 Barb. 644 ; affi'd, 36 Barb. 329. It was also held that it was no answer to the operation of the statute declaring the assignment void, that the instrument itself provided for an equal distribution of the assets among the cred- itors, for the reason that the legislature may have deemed it de- sirable that the administration of assets should be made by a re- ceiver appointed by the court rather than by an assignee selected by its own officers. Ibid. 36 Barb. 330, 331. It has also been held that the section of the Revised Statutes cited above was applicable to all corporations except those which are expressly exempted by the subsequent section cited. 1 11. S. 605, § 11. Hence, where a railroad corporation was organized under a special charter by which it was made " subject to the general restrictions and liabilities prescribed by such parts of title third of the eighteenth chapter, of first part of the Revised Statutes as are not repealed," it was held that this express allu- §11-8.] ASSIGNMENTS BY COEPOEATIONS. 129 sion to a specified portion of the statute did not exempt the cor- poration from the operation of the fourth title of the same chnp- ter in which the section cited above occurs. Bowen v. Lease, 5 Hill, 221. In 1882 (Laws of 1882, c. 402, § 1, par. 39), the section cited above was expressly repealed. At the same session of the legis- lature an act was passed entitled, " An act to revise the statutes of this State relating to banks, banking, and trust companies" (Laws of 1822, c. 409), and by § 187 of that act a portion of the section was re-enacted, but its application appears to have been limited to moneyed corporations only. (See post, § 116.) By § 214 the term moneyed corporations is construed to meaa " every corporation having banking powers, or having the power to make loans upon pledges or deposits, or authorized by law to make insurances." By Laws of 1884, c. 434, the repealing act of 1882 was amended by omitting that portion of the act relating to section four of title four, of chapter eighteen, of part one of the Revised Statutes {supra), thereby re-enacting that section and restoring the law as it stood previous to the passage of the act of 1882. Insolvent corporations other than moneyed corporations cannot therefore now make general assignments, although for a short time from 1882 to 1884 it seems that they could do so. In the case of Smith v. Danzig (64 How. Pr. 320, 324), which was decided in 1883, the act of 1882 was not referred to. Jus- tice Pratt in deciding that case said : " Unlike the case of indi- viduals, insolvent corporations are forbidden by law to grant preferences to any creditors. They are forbidden from making assignments, partly for that reason and in part because that in- volved the selection of their own trustee, and so worked out in- directly that which they are forbidden to do directly." Cit- ing Harris v. Thompson, 15 Barb. 62, and Sibell v. Hemsen, 33 N. Y. 95. Both of these cases, however, were decided solely upon the section of the Eevised Statutes cited above. So in Nat. Broadxoay Bank v. Wessell Metal Co. 66 Supm. Ct. (59 Hun), 470, 473, Mr. Justice Barrett, speaking of the powers of a corporation under the Revised Statutes, said : " Nor could the directors prevent the collection of the plaintiff's debt by making a general assignment for the equal benefit of all the cred- 9 130 GKNKRAL ASSIGNMENTS. [cil. vm. itors, as the statute expressly forbids the making of any assign- ment whatever, preferential or non-preferential. See Bickndl V. Speir, 45 State K. 651, and Ladew v. Hudson Riv. B. & S. Co. 6S Siipm. Ct. (Gl Ilun), 333. § 119. Statutory restrictions on assignments by corpora- tions — Recent legislation as to business corporations.— By the Stock Corporation Law passed in 1890 (Laws of 1890, c. 564, § 48), the section of the Revised Statutes cited above was modi- tied so as to read as follows : " No corporation which shall have refused to pay any of its notes or other obligations when due, in lawful money of the United States, nor any of its officers or directors, shall assign any of its property to any of its officers, directors or stock- holders, directly or indirectly, for the payment of any debt ; and no officer, director or stockholder thereof shall make any trans- fer or assignment of its property, or of any stock therein, to any person in contemplation of its insolvency ; and every such trans- fer or assignment to such officer, director or other person, or in trast for them or for their beneiit, shall be void." It was held in Troy Waste Mfg. Co. v. Saxony Woolen Mills, 4 Misc. 245, and in Troy Waste Mfg. Co. v. Harrison, 80 Supm. Ct. (73 Finn), 528, that under this statute a manufacturing corpo- ration could not in contemplation of insolvency make a general assignment for the benefit of creditors even without preferences. By the Stock Corporation Law of 1892 (Laws of 1892, vol. II, p. 1838, § 48) the section of the act of 1890, cited above, was repealed, and in its place the following was enacted : " No corporation which shall have refused to pay any of its notes or other obligations when due, in lawful money of the United States, nor any of its officers or directore, shall transfer any of its property to any of its officers, directors or stockholders, directly or indirectly, for the payment of any debt, or upon any other consideration than the full value of the property paid in cash. No conveyance, assignment or transfer of any property of any such corporation bj' it or by any officer, director or stockholder thereof, nor any payment made, judg- ment suffered, lien created or security given by it or by any officer, director or stockholder when the corporation is insol- § 120. J ASSIGNMENTS BY DOMESTIC CORPORATIONS. 131 vent or its insolvency is imminent, with the intent of giving a preference to any particular creditor over other creditors of the corporation shall be valid. ' ' This provision seems to be levelled exclusively against the making of preferences by an insolvent stock corporation, and such corporations seem to have been restored to their common law powers, except as so limited. § 120. The present state of the authorities as to assign- ments by domestic stock corporations. — Conceding the com- mon law power of a business corporation to make a general as- signment for the benefit of its creditors, and bearing in mind that there now exists no statutory restriction upon that common law power, except the restriction as to preferences contained in the act of 1892, it seems to follow that such a corporation may make a valid general assignment for the equal benefit of all its creditors. If this power does not exist, it is for the reason that the common law rule has been modified by the decisions of the courts. It is to be remembered that the question was not open for debate from 182.5 to 1892, the statutes during that period preventing the making of such assignments by insolvent corpo- rations. Certain decisions, however, have been made which have an indirect bearing upon the subject. Thus there is a class of cases to wiiich reference has already been made, which hold that a transfer by a corporation involving its destruction and the abandonment of the purposes of its organization is ille- gal as against creditors {Oole v. Millerton Iron Co. 133 N. Y. 164 ; Ahhot v. Am. Hard Euhher Co. 33 Barb. 578 ; s. c. 21 How. Pr. 193 ; Nat. Broadway Bank v. Wessell Metal Co. 6fi Sup. Ct. [59 Hun], 470) ; but, as is pointed out in Vander- poel V. Gorman, 140 N. Y. 563, 568, that is an act essentially dif- ferent from a conveyance by an insolvent corporation of its prop- erty in trust for creditors. In Vanderpoel v. Gorman, supra, the power of a domestic trading corporation to make a general assignment was not before the court, but the general principles laid down in the opinion in that case justify the inference that, when the question is squarely presented under the present statute, the Court of Appeals will hold that an assignment without pref- erences may be made by such corporation. But see Compton v. Mellis, 46 State R. 563 ; s. o. 19 N. Y. Supp. 691. 132 GENERAL ASSIGNMENTS. [cH. VIII. § 121. Assignments by foreign corporations.— It was finally decided in Vanderpoel v. Gorman, 140 N". Y. 563, determining a difference of opinion in the lower courts (s. c. 3 Misc. 57, Com. Pleas ; Worthington v. Pfister Book Binding Co. 3 Misc. 418, Super. Ct. ; Lane v. Wheelwright, 76 Sup. Ct. [69 Hun], 180), that the statutes of this State (Laws of 1890, c. 564, § 48, cited supra, § 119) did not limit or affect an assignment for the bene- fit of creditors made in this State by a foreign corporation ; the provision of the statute applying only to domestic corporations. Since the change in the statute in 1892, restricting the making of preferences, there is a question as to the validity within this State of a general assignment with preferences made by a foreign corporation. That question was left open in Vanderpoel v. Oorman, supra, p. 574. See Coats v. Donnell, 94 N. Y. 168. There has been as yet no expression of opinion in the reported cases as to the effect of a preferential assignment by a foreign corporation of property within this State.' The question is one of interstate comity which will be considered in another plafte. See Chap. XVII. In Barth v. Backus, 140 N. Y. 230, the question of the effect of a voluntary general assignment by a for- eign corporation was not before the court. It was there held that an assignment executed as a part of tlie insolvent law of another State, being in the nature of an involuntary transfer by operation law, had no extra territorial effect. See Chap. XVII. § 122. Assignments by corporations — Banking associa- tions.- — Banking associations organized under the act of 1838 (Laws of 1838, c. 260), although corporations as determined by the weight of authority [People v. Supervisors of Niagara, 4 Hill, 20 ; Willoughhy v. Comstock, 3 Id. 389 ; People v. Asses- sors of Watertown., 1 Id. 616 ; Leavitt v. Blatchford, 5 Barb. 9 ; 8. c. 17 N. Y. 521 ; Gillet v. Moody, 3 N. Y. 479 ; Cuyler v. Sanford, 8 Barb. 225), were held not to be subject to the pro- visions of the second title of the eighteenth chapter of the Revised Statutes, and not therefore included in the exception to the eleventh section, and consequently come under the operation of ' See article in 27 American Law Review, 846, by Judge Seymour D. Thompson, entitled " The Power of Corporations to Prefer Creditors." §123.] ASSIGNMENTS BY BANKING ASSOCIATIONS. 133 the section of the Revised Statutes cited above. Rohinson v. Bank of Attica, 21 N. Y. 406 ; Curtis v. Leavitt, 15 N. Y. 9 ; Leavitt v. Blatchford, 17 N. Y. 521 ; see Butcher v. Importers' (& Traders' Bat. Bank, 59 N. Y. 5. Such corporations, when insolvent or in contemplation of in- solvency, could not, while this section of the Revised Statutes remained in force, make a general assignment. Matter of Em- pire City Bank, 10 How. Pr. 498, 502 ; Robinson v. Bank of Attica, 21 N. Y. 406 ; Curtis v. Leavitt, 15 N. Y. 9 ; Lewoitt v. Blatchford, 17 N. Y. 521. See Butcher v. Importers'' & Traders' Nat. Bank, 59 N. Y. 5. But since the repeal of that statute the power of banking associations to make a general as- signment is to be determined by the banking act of 1882 (Laws of 1882, c. 409). That act embodies in a revised form the pro- visions of the act of 1838, c. 260, and of the act of 1849, c. 226. It provides for the supervision and examination of banks by the Superintendent of the Banking Department (Laws of 1882, c. 409, § 12), and for proceedings on the insolvency or imminent danger of insolvency of such corporations (Laws of 1882, c. 409, §§ 130, 131, 132, 133," 134). Tlie Code of Civil Procedure (§ 1785) author- izes the Attorney-General to bring an action for the dissolution of a corporation, if the corporation has banking powers or power to make loans on pledges or deposits, or to make insurances when it becomes insolvent or unable to pay its debts, or has vio- lated any of the provisions of the act by or under which it was incorporated or of any other act binding upon it. While there is no express provision of law now in force prohibiting the mak- ing of a general assignment by banking associations, it may be that the provisions of the statute above referred to will be re- garded as so inconsistent with the exercise of the power to make an assignment, either with or without preference, and that such power must, therefore, be regarded as impliedly prohibited. Re Empire City Bank, 10 How. Pr. 502. § 123. Assignments by corporations — Moneyed corpora- tions. — The term " moneyed corporation," as used in the Bank- ing Laws, is declared to mean (Laws of 1882, c. 402, § 214) : " Every corporation having banking powers, or having the power to make loans upon pledges or deposits, or authorized by law to 134 GENERAL ASSIGNMENTS. [CH. VIII. make insurances." It is said by Mr. Paine, in his work on the Banking Laws (3d ed. page 219), that the banks referred to in this definition are not banks organized under the Laws of 1838 (c. 4 of the Banking Act of 1882), but to the corporations included in Chapter IX of the baulking act — to wit, trust, loan, and mortgage security companies, and certain companies having cer- tain banking powers. Insurance companies are moneyed corporations, and come within the operation of the section cited prohibiting preferences. mil V. Heed, 16 Barb. 280 ; Eurlbut v. Carter, 21 Barb. 221 ; Laws of 1882, c. 409, § 214. With regard to moneyed corporations, it is to be observed in the first place that neither the provisions of the Revised Statutes, to which we are about to refer, nor the provisions of the bank- ing law of 1882, apply to moneyed corporations existing on the first day of January, 1828. They do, however, apply to such corporations created, or whose charters shall have been renewed or extended after that time, " unless such corporation shall be expressly exempted from the said provisions in the act creatino;, renewing or extending such corporation." Laws of 1882, c. 409, § 215, 1 R. S. 605, § 11 ; 2 R. S. 7th ed. 1536. It was provided in the Revised Statutes that " no convey- ance, assignment or transfer, not authorized by a previous reso- lution of its board of directors, shall be made by any such cor- poration of any of its real estate, or of any of its effects, exceed- ing the value of one thousand dollars," etc. 1 R. S. 591, § 8 ; 2 R. S. 6th ed. 298 ; 2 R. S. 7th ed. 1366 ; 1 Edm. St. 549. And it was further provided, " no such conveyance, assign- ment or transfer, nor any payment made, judgment suffered, lien created, or security given, by any such corporation when in- solvent, or in contemplation of insolvency, with the intent of giving a preference to any particular creditor over other cred- itors of the company, shall be valid in law ; and every person receiving, by means of any snch conveyance, assignment, trans- fer, lien, security or payment, any of the efiEects of the corpo- ration, shall be bound to account therefor to its creditors or stock- holders, or their trustees, as the case shall require." 1 R. S. 591, § 9 ; 2 R. S. 6th ed. 298, § 9 ; 2 R. S. 7th ed. 1366 ; 1 Edm. St. 549. § 123.] ASSIGNMENTS BY MONEYED COKPORATIONS. 135 In 1882, each of the sections of the Revised Statutes cited above, were repealed (Laws of 1882, c. 402, § 1, par. 39), and the following sections were inserted in the banking act (Laws of 1882, c. 409) : " § 186. No conveyance, assignment or transfer, not author- ized by a previous resolution of its board of directors, shall be made by any such' corporation of any of its real estate, or any of its effects, exceeding the value of one thousand dollars ; but this section shall not apply to the issuing of promissory notes, or other evidences of debt, by the officers of the company in the transaction of its ordinary business, nor to payments in specie or other current money, or in bank bills, made by such officers ; nor shall it be construed to render void any conveyance, assign- ment or transfer, in the hands of a purchaser for a valuable con- sideration, and without notice. " § 187. No such conveyance, assignment or transfer, nor any payment made, judgment suffered, lien created, or security given by any such corporation when insolvent, or in contemplation of insolvency, with the intent of giving a preference to any particu- lar creditor over other creditors of the company, shall be valid in law ; and every person receiving by means of any such con- veyance, assignment, transfer, lien, security or payment, any of the effects of the corporation shall be bound to account therefor to its creditors or stockholders, or their trustees, as the case shall require ; and whenever any incorporated company shall have re- fused the payment of any of its notes, or other evidences of .debt, in specie or lawful money of the United States, it shall not be lawful for such company, or any of its officers, to assign or transfer any of the property or choses in action of such com- pany to any officer or stockholder of such company, directly or indirectly, for the payment of any debt ; and every such transfer and assignment to such officer or stockholder shall be utterly void." In Brouwer v. Harbech (9 N. Y. 589, 593), it was held that under this section an assignment by a corporation actually, though Hot avowedly insolvent or in contemplation of insolvency, which ' The word " such" refers back to the antecedent " mnnfyed corporations" in section 184. 136 GENERAL ASSIGNMENTS. [CH. VIII, actually ensues, with the intent to give a preference, is void. In delivering the opinion of the court, Mr. Justice W. F. Allen says : " So long as insolvency neither exists nor is contemplated, the corporation, like an individual, can appropriate its means to the payment of its debts in such order and in such amounts and proportions as the directors please. But upon insolvency, either actual or contemplated, this power ceases, and the law declares the absolute right of every creditor to share pro rata in the assets of the company, and will not suffer this right to be de- feated by any act of the corporation or its officers." See s. o. below, opinion of Bosworth, J., 1 Duer, 114 ; Marine Bank v. Clements, 31 N. Y. 33. In Coats V. Donnell, 94 N. Y. 168, it was held that a corpo- ration in the absence of statutory restrictions has the same right as an individual to prefer creditors, and that the provisions of the Revised Statutes applied to domestic and not to foreign cor- porations. The provisions above cited in reference to moneyed corpora- tions do not, in express terms, prohibit a general assignment made without intent of giving a preference and for the equal benefit of all creditors, and in a number of reported cases such assignments by moneyed corporations have been sustained. Bowery Bank Case, 5 Abb. Pr. 415 ; s. c. 16 How. Pr. 56 ; Ilurlhut V. Carter, 21 Barb. 221 ; IIUl v. Beed, 16 Barb. 280 ; Curtis V. Zeavitt, 15 JSl. Y. 9, 110. § 124. Preferential assignments by corporations.— The statutes above cited in effect prohibit insolvent corporations of every description from making preferential assignment. It re- mains to consider the character of the act which will be regarded by the courts as falling within the description of a transfer or assignment in contemplation of insolvency. These questions will be considered in connection with the subject of preferences, j)ost, Chapter XL § 125. Assignments by partners of partnership property. — In regard to partnership affairs generally, each partner, being the agent of all, has the right of disposing of all or any part of the partnership effects for any purpose falling legitimately within § 125.] ASSIGNMENTS BY PARTNERS. 137 the scope of the object for which they have associated together. An absolute sale, therefore, by a single partner, of the entire partnership stock, or a transfer directly by him of all the joint property to creditors in payment of debts, though the act should virtually lead to the dissolution of the firm, is clearly within his powers. Graser v. Steliwagen, 25 N. Y. 315 ; Mahbett v. White, 12 N. Y. 442 ; Van Brunt v. Applegate, 44 N. Y. 544 ; Avery v. Fisher, 35 Supm. Ct. (28 Hun), 508 ; Piatt v. Hunter, 11 Weekly Dig. 300 ; rev'd, 86 N. Y. 641 ; McClel- land V. Eemsen, 3 Abb. Dec. 74 ; affi'g 36 Barb. 622 ; Egberts v. Wood, 3 Paige, 517 ; Haggerty v. Granger, 15 How. Pr. 243 ; see Kimball v. Hamilton Fire Ins. Oo. 8 Bosw. 495. But a transfer of the entire partnership property to a trustee is of a different character. The distinction is clearly pointed out by Daly, J., in Fisher v. Miirray, 1 E. D. Smith, 341, 344. He says : " When a partner makes a sale of the entire partnership effects in the course of trade, or transfers the whole of the joint property to creditors in the payment of debts, it is not necessary that the other partners should be consulted. His right to do so is undoubted. The necessity for consulting the others in the case of an assignment, however, grows out of the circumstance that the assignment conveys the property not to creditors directly, but to a trustee. From the fact that the assignment is an act which virtually puts an end to the partner- ship, which divests the partqers of all future control over their affairs, and confides the administration of them to a person who is to act thereafter in their place and stead, a trustee is sub- stituted for the firm, who, in the sale and disposition of its assets, and in the general winding up of its affairs, exercises a greater or less amount of discretion. It is in the selection of the person to whom so important a trust is to be committed, that all the partners have a right to be consulted, and whose appointment, therefore, must be a joint act.' ' This doctrine has not uniformly prevailed. See Anderson v. Tomphins, 1 Brftek. 456, Mar- shall, Ch. J. ; Robinson v. Crowder, 4 MeOord's L. 519 ; Story on Partnership, 7th ed. §§ 307 et seq. ; Burrill on Assignments, 6th ed. §§ 47-54. But in this State it is settled by overwhelming authority, that one partner is not authorized to execute an assign- ment for the benefit of creditors, except with the consent and con- 138 GENERAL ASSIGNMENTS. [CH. VIII. cnrrence of all the partners, for the reason that authority to make such an instrument is not implied by the act of partnership, and consequently cannot be inferred or presumed from the partnership relation. Welles v. March, 30 N". Y. 314 ; Eolinson v. Greg- ory, cited in Welles v. March, supra; re\r'g s. c. 29 Barb. 560 ; Adee v. Cornell, 32 Supni. Ct. (25 Hun), 78 ; Wetter v. SchUeper, 6 Abb. Pr. 123 ; s. c. 4 E. D. Smith, 707 ; Bitch- cock V. St. John, Hoffm. Cli. 511 ; Fisher v. Murray, 1 E. D. Smith, 341 ; JIaygerty v. Granger, 15 How. Pr. 243 ; Pettee v. Orser, 6 Bosw. 123 ; Havens v. Ilassey, 5 Paige, 30 ; Defning v. Volt, 3 Sandf. 284 ; Gates v. Andrews, 37 N. Y. 657 ; Paton v. Wright, 15 How. Pr. 481 ; Coope v. Bowles, 18 Abb. Pr. 442 ; s. 0. 28 How. Pr. 10 ; 42 Barb. 87. See note in 22 Am. L. Keg. N. S. 37, on the right of one partner to assign co partnership property. In the earlier cases a distinction was attempted to be drawn between assignments with preferences and those which were for the equal benefit of all creditors ; it was held that while there was no implied authority to execute an assignment with prefer- ences, yet possibly there might be such a power if the assign- ment was ratable. Hitchcock v. St. John, Hoffm. Ch. 511 ; see Havens v. Hussey, 5 Paige, 30 ; Pettee v. Orser, 6 Bosw. 123 ; Pars, on Part. 4th ed. § 110. But there appears to be no substantial reason why the power should exist in one case if it does not in the other. Wetter v. SchUeper, 4 E. D. Smith, 707 ; s. c. 6 Abb. Pr. 123 : Bemivg v. Colt, 3 Sandf. 284. § 126. Assignments by co-partners— Express authority. — One partner may of course execute a general assignment on behalf of the firm if he is expressly authorized to do so by the other partners. Zowenstein v. Flauraud, 18 Supm. Ct. (11 Hun), 399 ; affi'd, 82 N. Y. 494 ; Kelly v. Baker, 2 Hilt. 531 ; Baldwin v. Tynes, 19 Abb. Pr. 32 ; Roberts v. Shep- ard, 2 Daly, llO ; Nat. Bank of Troy v. Scriven, 70 Supm. Ct. (63 Hun), 375 ; Emerson v. Senter, 118 U. S. 3, and the author- ity may be either verbal or in writing ; Marline v. Eohinson, 85 Supm. Ct. (78 Hun), 115 ; s. c. 60 State E. 498. And such an authority may be implied from circumstances, or acts of the partners not joining in the execution of the instru- ment. § 126. J ASSIGNMENTS BY PARTNERS. 139 The following cases illustrate the circumstances under which such an implication of authority will arise. In Welles v. MarcL, 30 N. T. 344, one of the partners absconded, leaving a letter addressed to his co-partner, in which he said : " I hereby assign you my interest in the business of Nace & Co. and Nace ife Keinnie ; take charge of everything in our business ; close it up speedily." This was held by the Court of Appeals sufficient to confer upon the remaining partner authority to execute an as- signment on behalf of the firm. In Palmer v. Myers (43 Barb. 509 ; s. c. 29 How. Pr. 8) and National Battle v. Sachett (2 Daly, 395), the act of absconding and leaving the business in the possession of the remaining partners was held to authorize the remaining partners to assign the partnership property for creditors, and to the same effect is Kelly v. Balcer^ 2 Hilt. 531 ; Kemp V. Carnley, 3 Duer, 1 ; see Rumery v. McCulloch, 54 Wis. 565 ; s. c. 14 Rep. 190. So, when two partners agreed that if either failed to contribute his proportion of the capital, the other might dissolve and close up the partnership, it was held that if such failure occurred on the part of one the other had sufficient authority, under the agreement, to execute a general assignment of the firm's prop- erty for the benefit of creditors, especially where there was evi- dence that the delinquent partner knew of and consented to the assignment. Roberts v. Shepard, 2 Daly, 110. In Klumpp V. Gardner, 114 N. Y. 153, where one partner being advised of the embarrassed condition of the firm, and being about to sail for a foreign country on business of the firm, directed the remaining partner if he should have to make an assignment to prefer two specified creditors, it was held that the partner who remained was authorized to make an assignment in the firm name, notwithstanding that before the assignment was made the debts due to the creditors who were to be preferred had been paid. This case was followed in Heald v. MacOowan, 15 Daly, 233 ; 25 State E. 579. In Hooper v. BailUe, 118 N. Y. 413, it was said that in an action by firm creditors to set aside an assignment, if the plaintiff desires to raise the ques- tion of the assent of the non-executing partner, it should be pre- sented by the pleading. In that case the Court of Appeals held, reversing the court below, that sufficient evidence of assent was 140 GENERAL ASSIGNMENTS. [cH. Tin. found in the conversation and correspondence presented to au- thorize one partner to execute an assignment on behalf of his co-partner, one of whom was abroad. See same case on second trial. Hooper v. Beecher, 135 N. Y. 617. Also Nat. Bank of Troy v. Soriven, 70 Snp. Ct. (63 Hun), 375. But the temporary insanity of one partner does not authorize the other partner to make a general assignment. Stadelman v. Loehr, 54 Supm. Ct. (47 Hun), 327. Nor will the mere fact of the absence of a partner from the country be regarded as conferring an authority upon the remain- ing partners to execute ati assignment. Robinson v. Gregory^ cited in Wdles v. March, 30 IST. Y. 344 ; rev'g s. c. 29 Barb. 560 ; Coope v. Bowles, 42 Barb. 87 ; s. c. 28 How. Pr. 10 ; 18 Abb. Pr. 442 ; Pettee v. Orser, 6 Bosw. 123 ; see Sheldon v. Smith, 28 Barb. 593. But, to render a general assignment in trust for the benefit of creditors, void in law because not executed by all the mem- bers of the firm, those who did not sign it must be established partners, not as to third persons,, but between themselves and the admitted partners who signed the instrument. Therefore, the fact that one may have become liable as a partner to third per- sons, does not prevent those who are the actual partners, inter sese, from executing a general assigumfent without his consent. Adee v. Cornell, 93 N. Y. 572 ; affi'g s. c. 32 Supm. Ct. (25 Hun), 78. And to similar efiFect are Rookafellow v. Miller, 107 N. Y. 507 ; St. Nicholas Bank v. De Bivem, 3 N. Y. Supp. 666 ; Osborne v. Barge, 29 Fed. R. 725. When a co-partnership assignment appears on its face to have been executed by one of the partners with the authority of his co-partner, it is not necessary for the assignee claiming under the assignment to establish the authority of the partner so exe- cuting, but the burden of proof is upon the person attacking the validity of the assignment to show the want of authority. Sher- man v. Jenkins, 77 Sup. Ct. (70 Hun), 593. It should be remarked, that where any portion of the partner- ship assets consists of real estate, it must be conveyed by the party holding the legal title. " No partner," says Mr. Parsons (Parsons on Partnership, 4th ed. § 269), " or partners can convey any interest or title in or to real estate not held of record in their §§ 127, 128.J ASSIGNMENTS BY PARTNERS. 141 names, although it is partnership property beyond all question." A conveyance by one partner who has the legal title to an undi- vided half of real estate, the whole of which in equity is partner- ship property, can convey a good title to such moiety to a cred- itor of the firm, without the knowledge or consent of his co-part- ner. Van Brunt v. Applegate, 44 N. Y. 544. § 127. Assignment by partner of his interest.— The inter- est which each partner has in the partnership property, is an in- terest subject to the rights of all the partners and all the part- nership creditors, and this is the only interest which he can convey. A conveyance of that interest would not vest in the assignee any specific portion of the partnership property, but woald give him only the right to call the other partners, and those claiming under them, to account and pay over what might remain after the payment of the iirm debts and a settlement with the co-partners. Haggerty v. Granger, 15 How. Pr. 243, 248, Mitchell, J. ; Kirly v. SchoonmaTcer, 3 Barb. Ch. 46, 50 ; Menagh v. Whit-well, 52 JSf. Y. 146, 158 ; Parsons on Partner- ship, 4th ed. § 106. Thus, where two firms, one in Havana, the other in New York, entered into an agreement to parchase and ship goods on joint account, to be consigned to the New York firm, and thus became partners in the joint enterprise, an assignment by the New York firm of all their property in trust for the benefit of their creditors, carried only their residuary interest in the joint property, and the assignee was enjoined from appropriating the whole partnership assets of the two firms to the payment of the separate debts of the New York house. Davis v. Orove, 2 Robt. 134, 635 ; s. c. 27 How. Pr. 70. Where one of the "members of a firm becomes insolvent and makes a general assignment of all his property for the payment of his debts, the partnership is thereby dissolved and the solvent partner has the right to manage and close up the business, and to mortgage the firm property for the payment of a firm debt. Ogden v. Arnot, 36 Supm. Ct. (29 Hun), 146. § 128. Assignment after dissolution. — Where the partner- ship has been dissolved and the partnership assets transferred in 142 GENERAL ASSIGNMENTS. [CH. VIII. good faith to the continuing partners, they may execute an as- signment of the property so transferred in trust for the paymeut of their debts {Stanton v. Westover, 101 N". Y. 265 ; Crane v. Roosa, +7 Supm. Ct. (40 Han), 455 ; Dimon v. Hazard, 32 N. Y. 35 ; Smith v. Howard, 20 How. Pr. 121), but if such transfer is fraudulent, and made with tiie intent of defeating the rights of the partnership creditors, it will not be sustained. Heye v. Bolles, 2 Daly, 231 ; s. c. 33 How. Pr. 266 ; Hard v. Milligan, 8 Abb. JST. C. 58 ; BtirTians v. Kdly, 17 State R. 552 ; see post, § 171. § 129. Assignment by surviving partners. — It is now settled in this State that a snrviv^ing partner can execute a general as- signment of the property of the firm. Williams v. Wkedon, 109 N. Y. 333 ; llaynes v. Brooks, 116 N. Y. 487 ; Durant v. Pierson, 124 N. Y. 444, 452 ; Emsrson- v. Senter, 118 ir. S. 3 ; Beste V. Berger, 17 Abb. N. C. 162, atfi'd 110, N. Y. 644. In Ndson V. Tenney, 43 Supm. Ct. (36 Hun), 327, in an action brought by the representatives of the deceased partner to set aside an assignment executed by the survivor, it was held that as to the representatives of the deceased partner the survivor occupied a relation of trust, and an assignment with preferences executed by him was an attempted abandonment of the trust which equity would prevent and would administer the trust through a receiver. This case must now be regarded as overruled by the authorities above cited, and it may now be regarded as settled that it is not necessary for the representatives of the deceased to assent to the assignment. In the earlier case the right of a sur- viving partner to make an assignment with preferences is in doubt. See Hutchinson v. Smith, 7 Paige, 26, 35 ; Egberts v. Wood, 3 Paige, 517 ; Loeschigk v. Hatfield, 5 Robt. 26 ; s. c. as Loeschigk v. Addison, 4 Abb. Pr. N. S. 210 ; affi'd, 51 N. Y. 660. § 130. Power of surviving partner to assign partnership real estate. — Where real estate is conveyed to a firm, or to co- partners in their individual names for the use and benefit of the firm, or in the payment of debts due the firm in the absence of any agreement or understanding to the contrary, the grantees § 130.J ASSIGNMENTS BY SURVIVING PARTNEES. 143 become at law tenants in common of the land, and upon the death of either the legal title to his individual share descends to his heirs at law. Buchan v. Sumner, 2 Barb. Ch. 165 ; Coles v. Coles, 15 Johns. 159 ; Lindley on Partnership, starpaging 341, note. The heir at law holds in common with the surviving partner in trust for the purposes of the partnership : first, for the cred- itors ; second, for the members of the firm and their representa- tives. Lindley on Partnership, supra; Broom v. Broorn, 3 Myl. & Keen, 443 ; Howard v. driest, 5 Mete. (46 Mass.) 582 ; Buokan v. Sumner, supra. It follows that the surviving partner cannot sell the real estate without the concurrence of the heir at law. Foster'' s Appeal, 74 Pa. State, 391, 397 ; Parsons on Partnership, 4th ed- §269. The surviving partner, therefore, cannot by assignment in trust for the creditors convey the legal title to partnership real estate. But since the heir at law has the legal title in common with the surviving partner only in trust for the purposes to which it should be devoted, it has been held that a court of equity will compel the heir at law to join with the assignee of the surviving partner, or with the surviving partner himself, in making an effectual title to the real estate upon a sale in order to liquidate the partnership affairs. Thus, in Belmonico v. Guillaume, 2 Sand. Ch. 366, in "an action for a specific perform- ance, to which the heir at law was made a party, where the sur- viving partner of an insolvent firm had contracted to sell real estate belonging to the firm, it was held that the legal title to the extent of an undivided half was in the heir at law, but that he might be compelled to join with the surviving partner in exe- cuting a conveyance. And in Shanks v. Klein, 104 U. S. 18, where a surviving partner had made a general assignment for the benefit of cred- itors of the firm, and the assignee had conveyed to purchasers real estate owned by the firm which he had sold as such assignee, it was held that the executor of the deceased partner would be restrained in equity from instituting proceedings at law to eject the purchasers from the assignee, and that he would be com- pelled, furthermore, to execute conveyances to the purchasers in 144 . GENERAL ASSIGNMENTS. [CH. vm. support of the assignee's title. The Engh'sh and American cases are to some extent considered in the opinion. In harmony with this case are Andrews v. Brown, 21 Ala. 437 ; Murphy v. Abrams, 50 Id. 293 ; Dupuy v. Leavenworth, 17 Cal. 262. There are cases that hold that one partner with the mere verbal consent of his copartner can make an assignment of the copartnership real estate in the firm name. Rumery v. McCulloch, 54 Wise. 565 ; Sullivan v. Smith, 15 Neb. 476. § 13 r. Assignments by limited partnersh p. — Under the following statutes, h'mited partnerships and their members, when insolvent or in contemplation of insolvency, are restricted from making assignments, giving any preference to creditors. The statute is as follows : " Every sale, assignment, or transfer of any of the property or effects of such partnership, made by such partnership w^hen in- solvent, or in contemplation of insolvency, or after, or in con- templation of the insolvency of any partner, with the intent of giving a preference to any creditor of such partnership or insol- vent partner, over other creditors of such partnership ; and every judgment confessed, lien created, or security given, by such partnership, under the like circumstances, and with the like in- tent, shall be void, as against the creditors of such partnership." 1 R. S. 766, § 20 ; 3 R. S. 7th pd. 2238. " Every such sale, assignment, or transfer of any of the prop- erty or effects of a general or special partner, made by such gen- eral or special partner, when insolvent, or in contemplation of in- solvency, or after or in contemplation of the insolvency of the partnership, with the intent of giving to any creditor of his own, or of the partnership, a preference over creditors of the partner- ship ; and every judgment confessed, lien created, of security given, by any such partner, under the like circumstances, and with the like intent, shall be void, as against the creditors of the partnership."' 1 R. S. 767, § 21 ; 3 R. S. 7th ed. 2238. " Every special partner, who shall violate any provision of the two last preceding sections, or who shall concur in, or assent to, any such violation by the partnership or by any individual part- ner, shall be liable as a general paitner." 1 R. S. 767, § 22 ; 3 R. S. 7th ed. 2238. § 131. J ASSIGNMElSrTS BY LIMITED PARTNERSHIP. 145 " In case of the insolvency or bankruptcy of the partnership, no special partner shall, except for claims contracted pursuant to section seventeen, under any circumstances, be allowed to claim as a creditor, until the claims of all the other creditors of the partnership shall be satisfied." 1 E. S. 767, § 23 ; 3 R. S. 7th ed. 2238. The object and proper construction of these sections were care- fully considered in Fanshawe v. Lane (16 Abb. Pr. 71), and it was there held that they apply not only to preferences by the firm, or any of its partners, in assignments of the firm property ; but also to assignments by the individual members of their indi- vidual property, including their interest in the firm effects. It was also held that where one of the members of the limited partnership was at the same time a member of a general co-part- nership, which had executed an assignment of its property, this did not convey the individual partner's interest in the property of the limited partnership, and the assignment by the general part- nership was not therefore affected by the statute. The statute appears to have constituted the effects of the firm a special fund for the benefit of all the creditors of the firm, to be distributed in case of insolvency among such creditors ratably, and any creditor, although he has not proceeded to judgment and execution at law, may file a bill in equity to restrain the in- solvent partners from disposing of the property contrary to law and for the appointment of a receiver. Walworth, Ch., in Innes v. Lansing, 7 Paige, 583, 585 ; Walhenshaw v. Perzel, 4 Rpbt. 426 ; Whitcomb v. Fowle, 7 Abb. N". C. 295 ; s. c. 56 How. Pr. 365 ; see Galwey v. U. S. Steam Suga/r Refining Co. 36 Barb. 256, 263 ; Hardt v. Levy, 79 Supm. Ct. (72 Hun), 225. And any attempt to create a preference in favor of one creditor, or class of creditors, over another, is rendered void against the creditors of the firm. Mills v. Argall, 6 Paige, 577 ; see Van Alstyne v. OooTc, 25 JN. Y. 489, 492. So an assignment by a limited partnersuip, after the firm has become insolvent or in contemplation of insolvency, is void as against the creditors of the firm, if it provides for the payment of a debt due to the special partner ratably with the other cred- itors of the firm, or before all the general creditors are satisfied in full for their debts. Mills v. Argall^ supra. 10 146 GENERAL ASSIGKMENTS. [cH. Vin. An assignment for the benefit of creditors, made by a limited partnership containing preferences, is under the statute above cited void. It is not merely voidable, but it is so inoperative that no title passes, and hence a subsequent assignment made by the assignors without preferences will be valid. SchvMrts v. Soutter, 103 N. Y. 683 ; s. c. 5 Cent. R 620. But an assignment made by a limited partnership in good faith for the equal benefit of all creditors is valid. Robinson v. Mcintosh, 3 E. D. Smith, 221. Indeed it seems to be regarded as the duty of the partners, in case of insolvency of the firm, to make such a disposition of the property. Whitewright v. Stimp- son, 2 Barb. 379 ; Jachson v. Sheldon, 9 Abb. Pr. 127. And the neglect to do so will be a sufficient ground for the appoint- ment of a receiver. Some question has arisen as to the right of the general part- ners to make a general assignment of the firm property without the consent of the special partner. Mills v. Argall, 6 Paige, 577, 582 ; and see Hayes v. Heyer, 3 Sandf. 293 ; Hamens v. - Hussey, 5 Paige, 30. But in Robinson v. Mcintosh (3 E. D. Smith, 221) an assignment executed by the general partners only was held valid. And see Darrow v. Bruff, 36 How. Pr. 479 ; Schwartz v. Soutter, 103 N. Y. 683. In Tracy v. Tuffly, 134 U. S. 206, 224, occurring under the Texas statute, where the powers of general partners are substan- tially as in our statute, it was held that the general partners had power to execute a general assignment. § 132. To whom the assignment may be made. — The law permits the debtor to select the assignee who is to execute the trust, without the consent of his creditors, and even without con- sulting a single creditor. Learned judges throughout the Union have first combated, and then deprecated the sanction of such assignments. And it was with much doubt and difficulty that entire latitude in the selection of the trustee was finally conceded to the assignor. Sandf ord, A. V. C, in Cram v. Mitchell, 1 Sandf. Ch. 251 ; Webb v. Daggett, 2 Barb. 9. The right to select the assignee is unlimited, except by the control which courts may have in removing an improper trustee and in the single instance of a corporation which has made de- § 133. J SELECTION" OF ASSIGNEE. 147 fault in payment, in which case it cannot make an assignment to an officer or stockholder of such company. See ante, § J 19. The assignment may be made to a relative and to preferred creditors. In the case of Shultz v. Hoaglomd (85 W. Y. 464, 468), Finch, J., says : " The relationship of assignor and as- signee, and their intimacy and friendship, and the preference given to the latter as a creditor prove nothing by themselves. They are consistent with honesty and innocence, and become only important when other circumstances, indicative of fraud, invest them with a new character and purpose, and transform them from equivocal and ambiguous facts into positive badges of fraud." While the assignment may be made to a creditor, or to one who is not a creditor, yet a judgment creditor, by accepting an assignment as assignee, waives his right to enforce his judgment by levy and sale under execution {Hawley v. Manoius, 7 Johns. Ch. 174 ; Rogers v. Rogers, Hopk. Ch. 515), for the reason that the assignee must sell, pay, and distribute in the character of a trustee, and not of a judgment creditor ; and to take out an execution upon the judgment against property over which he is exercising a discretion and control as trustee, would be incom- patible with a due discharge of the trust, and a manifest breach of it. Chan. Kent, in Hawley v. Mancius, 7 Johns. Ch. 174, 185. Some authorities have gone so far as to hold that an assignee who is a judgment creditor not only waives his right to sell under execution upon his judgment, but that he in effect waives his lien, and consents to come in as a general creditor, except so far as he is preferred by the assignment. Harrison v. Mock, 10 Ala. 185 ; s. c. 16 Ala. 616. But the decisions in this State do not appear to necessarily lead to such a determination. An assignment by partners cannot be made to one of the firm. Sewall V. Russell, 2 Paige, 175. The assignee must be named in the instrument. Reamer v. Lamherton, 59 Penn. St. 462. A power to name the successor of an assignee, in case the assignee should wish to resign, is void. Planch V. Sckermerhorn, 3 Barb. Ch. 644. § 133. Selection and qualifications of assignee. — The selec- 148 GENERAL ASSIGNMENTS. [CH. Vm. tion of a suitable assignee is a matter of some moment, inasmuch as the choice of an improper person may furnish evidence of a fraudulent intent on the part of the assignor, -which will avoid the assignment {Reed v. Emery, 8 Paige, 417 ; Connah v. Sedg- wick, 1 Barb. 210 ; Browning v. Hart, 6 Id. 91), as well as to subject the assignee to removal by the court. The assignor is bound to select an assignee that will do all that the law requires of a trustee, in respect to the rights of those that have a beneficial interest in the property assigned. Olm- stead V. Herrick, 1 E. D. Smith, 310. The following cases furnish illustrations of the rule in refer- ence to the choice of assignees not properly qualified for the performance of their duties. Thus, where the debtor selected for assignees three relatives, of whom one was incapacitated by his residence, one by blindness, and the third by his want of education, from executing the as- signment ; this was regarded as strong evidence of an intent on the part of the assignor to keep the control of the property in his own hands, or to appropriate it for his own use and benefit. Cram v. Mitchell, 1 Sandf. Ch. 251. But the fact that the assignee does not reside within the State does not of itself furnish proof of fraudulent intent in making an assignment {Blachington v. Goldsmith, 3 How. Pr. N. S. 77 ; BachracTc v. Norton, 132 U. S. 337), though it may be re- garded as an element with other circumstances in forming a con- clusion of fraud. Nat. Park Bank v. Whitmore, 104 N. Y. 297 ; s. c. 47 Supm. Ct. (40 Hun), 499. So, where a debtor assigned his property in trust for his cred- itors to his brother, who, on account of a lingering disease, was unable to attend to business at the time of the assignment, and the debtor himself thought the disease of his brother incurable, and the latter subsequently died of it. It was held that this was suflBcient cause for declaring the assignment fraudulent and void as against creditors. Ourrie v. Hart, 2 Sandf. Ch. 390. The selection of such assignees furnishes strong presumption of an intent on the part of the assignor to keep the control of his property in his own hands and under his own disposal. This is the natural and inevitable result, when the assignee is physi- cally and mentally incompetent to act efficiently, as well as when § 134.] JOIN'l' ASSIGNEES. 149 his distance from the scene of action preclude his personal care and supervision. Sandford, A. V. C, in Currie v. Hart, supra. And where there are circumstances tending to show that the assignment was made with the intent of keeping the assigned property within the control and disposition of the assignor, this presumption will be rendered conclusive by the selection of the near relatives of the debtor as assignees, placing them all before other creditors in the schedule of preferred debts. Cram v. Mitchell, 1 Sandf. Ch. 251. It has been held, also, that a debtor cannot lawfully assign his property in trust for creditors to an insolvent assignee. Hag- ga/rty v. Pittman, 1 Paige, 298 ; Seed v. Emery, 8 Id. 417 ; Connah v. Sedgwick, 1 Barb. 210. Bat the better doctrine seems to be that the mere fact that the assignee is insolvent will not avoid the assignment, or furnish a ground for the removal of the assignee, where there are no other suspicious circumstances and the assignees are otherwise qualified. Pearce v. Beach, 12 How. Pr. 404 ; In re Paddock, 6 Id. 215. And it is thought that this would be especially the case under the present statute, which requires the assignee to give a bond for the faithful performance of his duties, and provides for his removal in case he should fail to do so. Laws of 1877, c. 466. § 134- Joint assignees. — The assignment may be made to sev- eral persons as well as to one. In such a case only those who accept the trust are required to act. Moir v. Brown, 14 Barb. 39. But those who accept must all act. Brennan v. Willson, 4 Abb. N. 0. 279 ; s. o. 7 Daly, 59 ; affi'd, 71 JST. Y. 502. A sub- sequent disclaimer or failure to act with the other assignees will not relieve the renouncing assignee from liability. Bowvfian v. Rainetaux, Hoffm. Ch. 150. Nor will it authorize the others to act without him. Shepherd v. McEvers, 4 Johns. Ch. 136 ; Bren- nan V. Willson, supra. He must either be discharged from the trust by an order or decree of a court of equity, or with the gen- eral consent of all persons interested in the execution of the trust. Oruger v. Halliday, 11 Paige, 314 ; Thatcher v. Candee, 3 Keyes, 157, 160 ; Diefendorf v. Spraker, 10 N. Y. 246. CHAPTER IX. • MAKING, ACKNOWLEDGING AND RECORDING THE ASSIGNMENT. § 135. The statute.— The act of 1860 (Laws of 1860, c. 348, § 1) for the first time regulated the manner of making and exe- cuting an assignment in this State. That act provided that the conveyance should be by writing, and should be acknowledged before an officer authorized to take the acknowledgment of deeds, and that the certificate of acknowledgment should be in- dorsed on the conveyance before delivery to the assignee. The General Assignment Act of 1877 (Laws of 1877, c. 466), extended and incorporated the provisions of the Act of 1860. The second section of tlie General Assignment Act as amended by Laws of 1888, c. 294, reads as follows : " Every conveyance or assignment made by a debtor of his estate, real or personal, or both, to an assignee for the creditors of such debtor, shall be in writing, and shall specifically state therein the residence and the kind of business carried on by such debtor at the time of making the assignment, and the place at which such business shall then be conducted, and if such place be in a city, the street and number thereof, and if in a village or town such apt designation as shall reasonably identify such debtor. Every such conveyance or assignment shall be duly acknowledged before an officer authorized to take the acknowl- edgment of deeds and shall be recorded in the county clerk's office in the county where such debtor shall reside or carry on his business at the date thereof. An assignment by copartners shall be recorded in the county where the principal place of busi- ness of such copartners is situated. When real property is a part of the property assigned, and is situated in a county other than the one in which the original assignment is required to be re- corded, a certified copy of such assignment shall be filed and re- corded in the county where such property is situated. The as- § 136. J KEQUIREMENTS OF STATUTE. 151 sent of the assignee, subscribed and acknowledged by him, shall appear in writing, embraced in or at the end of, or indorsed upon the assignment, before the same is recorded, and, if sepa- rate from the assignment, shall be duly acknowledged." § 136. Provisions directory and mandatory. — Some of the provisions of this section have been regarded as mandatory and others as directory merely. Speaking upon this point, Mr. Jastice Earl, in Warner v. Jaffray, 96 N". Y. 248, 252, says : "Section 2 of chapter 466 of tlie Laws of 1877 (the General Assignment Act) provides how a general assignment for the benefit of creditors shall be executed. It must be in writing and acknowledged, and the assignee must assent thereto in writ- ing, and when it has thus been executed and delivered, it takes effect, and the title to the property passes to the assignee. All else required by the statute may be done afterward, and if any of the other requirements are omitted the assignment is not thereby rendered void." In that case it was held that the re- cording of the assignment was not a prerequisite to its validity, in this respect modifying the decision in Rennie v. Bean, 31 Supm. Ct. (24 Hun), 123. A review of the authoritits in reference to the mandatory character of the provisions of this section will be found in Rennie v. Bean, supra, and in Mul- lin V. Siason, 31 State E. 210 ; s. 0. 63 Supm. Ct. (56 Hun), 645. The requirement of tlie statute that the assignment shall state the place and kind of business carried on by the assignor is direc- tory merely and not mandatory, the main purpose being to iden- tify the assignor. Dutchess Co. Mut. Ins. Co. v. Wagonen, 132 K. y. 398 ; s. c. 44 State K. 441 ; Otis v. Hodgson, 45 State R. 92 ; s. c. 18 N. Y. Supp. 599 ; Taggart v. Eer- rick, 62 Snpm. Ct. (55 Han), 569 ; s. c. sub. nom. Taggart v. Sisson, 29 State R. 424 ; MuUin v. Sieson, 3 1 Id. 210 ; StricTc- land^. Laraway, 29 Id. 873 ; Boah v. Blair, 32 Id. 911 contra ; Bloomingdale v. Seligman, 22 Abb. N. C. 98. A compliance with the provisions of the statute is not neces- sary in order to pass title to property in this State under an as- signment made by non-residents in another country which is valid at the place where it is made. Such was the ruling in re- gard to the act of 1860 {Ocherman v. Cross, 54 N. Y. 29), 152 GENERAL ASSIGNMENTS. [OH. IX. and the principles of the decision apply equally to the act of 1877. § 137. Form of assignment. — The statute prescribes no form in which the writing shall be drawn. Very informal instruments may constitute a general assignment. The whole of the assign- ment must be expressed in the written instrument. Frazier v. Truax, 34 Supm. Ot. (27 Hun), 587. But this rule will not prevent the introduction of parol proof for the purpose of show- ing that the whole transaction taken together was in effect a general assignment and invalid as such because of a failure to comply with statutory requirements. Thus in the case of Brit- ton V. Lorem (45 N. Y. 51 ; affi'g 3 Daly, 23), parol proof was introduced to show that a bill of sale, absolute on its face, was really made upon the trust that the defendants should convert the property into money, and from the proceeds pay all the vend- or's debts for borrowed money in full, and distribute the residue ^0 rata among all his other creditors. The instrument was held invalid as a general assignment because not acknowledged. So also several instruments may be construed together for the purpose of showing the true legal character of the transaction. Thus, since the statute, a deed of real estate, a bill of sale of personal property, and articles of agreement between the parties, all bearing the same date and relating to the same subject-matter, were read together as constituting an assignment of property in trust for the benefit of creditors. Yan Yleet v. Slauson, 45 Barb. 317 ; see Wynkoop v. Shardlow, 44 Barb. 84 ; s. 0. 29 How. Pr. 368 ; Mann v. Wiibeck, 17 Barb. 388 ; Codding- ton v. Davis, IN. Y. 186. Previous to the act of 1860, an assignment by a debtor of his property to an assignee in trust for creditors, might, under cer- tain circumstances, have been made without writing, or if in writing, need not have been acknowledged before any oflScer before delivery to the assignee, in order to be valid and effec- tual, to accomplish the purpose intended. Fairchild v. Owynne, 16 Abb. Pr. 23. But see Smith v. Woodruff (1 Hilt. 462), where a doubt was expressed by Brady, J. , as to whether a trust eo nomine for the benefit of creditors, could be created by parol. § 138.] FOEM OF ASSIGNMENT. 153 § 138. Form of the assignment (continued).— The usual form of an assignment in this State consists of a simple convey- ance of the debtor's property and a declaration of the trusts with a power of attorney annexed. The very laroje number of cases to which we shall hereafter have occasion to refer, in which assien- ments have been held invalid on their face, have, for tlie most part, arisen from an attempt on the part of the draughtsman to reserve some form of benefit to the assignor. " We have never heard of a case," says Mr. Justice Sandford, in Litchfield v. White (3 Sandf. 545, 554), " nor do we believe there has ever been one decided in this State, in which an assignment has been held fraudulent, which simply vested the debtor's estate in trus- tees, and directed them to convert it into money and apply it absolutely, and without reserve, to the payment of his debts ; whether equally among all the creditors, or with preferences." " An assignment," says Chief Justice Comstock, " drawn pre- cisely as it ought to be, will not undertake to speak to the assignee in regard to his duties under the trust. Those duties, unless the creditors themselves direct otherwise, are simply to convert the estate and pay the debts in the order and with the preferences indicated in the instrument. A trustee is always bound by any restrictions contained in the writing which creates the trust, and if these are inconsistent with the rights of creditors, the trust itself must fall to the ground." Ogden v. Peters, 21 N. Y. 23, 24. The assignee is a sort of substitute for the ofiScers of the lav,', and he must be left to act under the obligations and responsi- bilities which the law imposes. The assignor can neither pre- scribe conditions, nor invest the assignee with powers which tend in any degree to vary or modify the duties which the law de- volves upon him. Any clause in the assignment, therefore, which could be legitimately set up by the assignee as a justifica- tion for a course of conduct in regard to the assigned property, in any respect different from that which the law would dictate, of necessity vitiates the assignment. Jesswp v. Hulse, 21 N. Y. 168, 169, Selden, J. Where the assignment contains a mere clerical error, but the true meaning and intent are manifest, the court must give effect to the instrument according to its trne intent. In such a case it 154 GENERAL ASSIGNMENTS. [CH. IX. is not necessary that there should be a reformation of the instru- ment decreed. Simth v. Bellows, 3 State R. 305. § 139. Contents of the assignment.— The assignment is drawn with the usual formalities of a deed of conveyance of two parts. It has been customary to commence the instrument with a general recital of the insolvency of the grantor, and sometimes of the circumstances which led to the making of the assignment. Such recitals, while they may be evidence between parties and privies, are not evidence against strangers or third parties. Kel- logg v. Slawson, 1.5 Barb. 56, 57 ; see Huntington v. Havens, 5 Johns. Oh. 23. They should be drawn with care to avoid a construction of an intent on the part of the debtor to hinder or delay his creditors. In Bri^ham v. Tillinghast (15 Barb. 618), where the recital was that one purpose of the assignment was to secure the application of the property to the payment of the debts of the assignor in a fair and equitable manner, and " with- out sacrifice^'' the language was criticised as not happily selected. See s. c. reversed on another ground, 13 N. Y. 215 ; but see Vernon v. Morton, 8 Dana (Ky.), 247, 263. In genoi'al it is not desirable to do more than to direct in gen- eral terms a sale of the property and collection of the debts as- signed, and to designate to what debts and in what order the pro- ceeds shall be applied. Dunham v. Waterman, 17 N. Y. 9, reversing 3 Duer, 166 ; s. c. 6 Abb. Pr. 357 ; Jeasup v. Ilulse, 21 N. Y: 168 ; s. c. 29 Barb. 539 ; Litchfield v. White, 3 Sandf. 545. In the case of Flagler v. Schoeffel, 47 Supm. Ct. (40 Hun), 178, it was contended that an assignment drawn to the assignee, " his heirs, executors, administrators and assigns," was improper in form. The contention was unsuccessful. In Hess v. Blaheslee, 2 State R. 309, it was held that where the assignment was drawn to the assignee, " his successors and assigns," these words were not open to criticism. Under the Eevised Statutes (2 R. S. 748, § 1, 7th ed., vol. 3, p. 2205), words of inheritance are not necessary to convey an estate in fee simple, but such words may be needful to convey real estate situ- ated in States wiiere the common law still prevails. See Van Winkle v. Armstrong, 41 JST. J. Eq. 402 ; s. c. 4 Cent. R. 63. §§ 140-142.] DESCRIPTION OF ASSIGNED PROPERTY. 155 § 140. Consideration. — The conveyance is ordinarily upon a nominal consideration. Such consideration is sufficient to trans- fer the legal title. "The amount of the consideration," says Nelson, J., in Cunningham v. Freeborn (11 Wend. 240, 250 ; s, c. 1 Edw. Ch. 256 ; 3 Paige, 557), " was never material for this purpose, and it seems to be well settled that the relation of debtor and creditor between the parties, and the legal conse- quences of the assignment, constituted a sufficient consideration as between them." Lawrence v. Davis, 3 McL. 177 ; Ealeey v. Whitney, 4 Mason, 206, 214 ; see Kellogg v. Slawson, 15 Barb. 56 ; s. c. 11 N. Y. 302 ; see Rockwell v. MoGovern, 69 JST. Y. 294. While this consideration is sufficient to support the con- veyance, yet, as we shall see hereafter, the assignee coes not thereby become a purchaser for value so as to defeat any pre- existing equities. § 141. The conveyance. — If the purpose is to make a general assignment, and to include all of the debtor's property in the conveyance, the description should conform to this intention. We shall consider hereafter (see Chap. XX.) the circumstances under which an assignment of all the debtor's property is re- quired. § 142. Description of assigned property. — The description of the property intended to be assigned must be sufficiently certain to enable the assignee to distinguish it (Crovi v. Huby, 5 Mo. 484 ; Ryerson v. Eldred, 18 Mich. 12 ; Bellamy v. Bellamy'' s Admr. 6 Fla. 62) ; but if it may be made certain by parol it is sufficient. State v. Keeler, 49 Mo. 548 ; Hatch v. Smith, 5 Mass. 42 ; Emerson v. Knower, 8 Pick. 63 ; Pingree v. Com- stoc'k,y& Id. 46 ; Kevan v. Branch, 1 Gratt. 274. A general description as of " all and singular the goods and chattels, merchandise, bills, bonds, notes, book accounts, claims and demands, choses in action, books of account, judgments, evidences of debt, and property of every name and nature what- ever," is not void for uncertainty, although no inventory of the property be attached to the assignment, or be provided for in it. Kellogg v. Slawson, 15 Barb.' 56 ; s. c. 11 N. Y. 302 ; Ma- thews V. Pouliney, 33 Barb. 127. And, indeed, since the act lilG GENERAL ASSIGNMENTS. [CH. IX. of 1860, providing for the making and filing of an inventory of the property, such general description is the usual form. Terry v. Butler, 43 Baib. 39.5 ; Mathews v. Poultney, 33 Barb. 127. But the general terms employed must be sufficiently apt to em- brace all the property intended to be covered by the assignment. Thus, where the assignment was of " all the goods, chattels and effects and property of every kind, personal and mixed," it was held that the words " personal and mixed," limited the con- veyance to personal estate. lihoads v. Blatt, 16 N. B. K. 32. But a general assignment of all the property of the assignor's, real and personal, will pass the title to land, although not specifically mentioned in the schedule. Raynor v. Raynm, 28 Supm. Ct. (21 Hun), 36. If, in addition to the general terms of conveyance, the assign- ment refers to the property as enumerated and described in a schedule annexed, it has been held that the description in the schedule would limit the effect of the previous general convey- ance. Willies V. Ferris, 5 Johns. 335 ; see Holmes v. Hvb- lard, 60 N. Y. 183 ; U. 8. v. Rowland, 4 Wheat. 108 ; Mims^. Armstrong, 31 Md. 87 ; RundUtt v. Dole, 10 N. H. 458 ; Drisooll V. Fi'sk^, 21 Pick. 503. It is a rule of construction of all written instruments convey- ing property, that if a general clause be followed by special words, the instrument shall be construed according to the special matter ; and in the application of this rule it is held that the general words of an assignment should be restricted by a subse- quent clause referring to a schedule annexed for a more full de- scription. But this rule is subordinate to the paramount and more general rule that requires that all instruments shall be so construed as to give effect to the intention of the parties. Erai- grant Ind. Savings Bh. v. Roche, 93 N. Y. 374. See Bock v. Perkins, 139 U. S. 628. In Turner v. Jaycox (40 N. Y. 470), where the schedule con- tained no reference to the personal property, which was included in the terms employed in the body of the instrument, it was held that the reference to the schedule annexed did not limit the operation of the conveyance on the principle of construction pro- hibiting a false or erroneous addition from vitiating what had been previously sufficiently and fully described. To the same § ]43.] iSCHEBrLES, WHEN ANNEXED. 157 eflEect 18 Piatt v. Lott, lY N. Y. 478. Turner v. Jaycox, supra, and Piatt v. Lott, supra, are criticised and distinguished in £och V. Perhins, supra. Since the enactment of the statute prescribing the time and manner of the execution of the schedule, it is no longer usual in this State to describe the assigned property by reference to a schedule. § 143. Schedule, when to be annexed. — Where the descrip- tion in the body of the assignment is of all the debtor's property, with a reference to schedules, and the schedules in fact are ni.>t annexed at the time of the delivery of the instrument, such omis- sion will not invalidate the assignment. Birchell v. Strauss, 28. Barb. 293 ; Spring v. Strauss, 3 l^osw. 607 ; Turner v. Jaycox, 40 N. Y. 470 ; Wronleow v. Killeen, 3 Mon. L. B. 82 ; Piatt V. Zott, 17 JSf. Y. 478 ; Clap v. Smith, 16 Pick. 247 ; Brashear v. West, 7 Pet. 608. Contra, Moir v. Brown, 14 Barb. 39. But a different rule prevails when the assignment designates the debts to be paid by reference to a schedule an- nexed. Kercheis v. Schloss, 49 How. Pr. 284 ; Averill v. Loucks, 6 Barb. 470 ; Hotop v. Neidig, Yl Abb. Pr. 332 ; see post, § 147. Where the assignment was of all the property contained in Schedule B, and was made to pay all debts mentioned in Sched- ule A, referring to these schedules as annexed, but they were not annexed or recorded with the assignment, it was held that the schedules were not a necessary part of the assignment, since the assignment conveyed all the debtor's property in trust to pay all his debts. Burgha/rd v. Sondheim, 50 Supr. Ct. (18 J. & S.) 116. And where the schedule of preferred debts was prepared at the time of the execution of the assignment, and was then signed by the assignors and acknowledged by one of them, but was not annexed to the assignment, and the assignment was re- corded, and a day or two afterward the schedule duly acknowl- edged was sent to the clerk with direction to attach it to the assignment ; no rights having intervened it was held that the as- signment was not invalid by reason of the informality in its exe- cution. Franey v. Smith, 125 N. Y. 44 ; rev'g s. c. 54 Supm. Ct. (47 Hun), 119. 158 GENERAL ASSIGNMENTS. [cH. IX. The schedules required to be filed under the act are the sub- ject of consideration in another place. The schedules so required to be filed are regarded a part of the assignment. Terry v. But- ler^ 43 Barb. 395 ; De Camp v. Marshall, 2 Abb. Pr. N". S. 373 ; Talcott v. Bess, 38 Supra. Ct. (31 Hun), 282 ; Shults v. Roagland, 85 N. Y. 464, 468, 469. See Chap. XIX. § 144. Declaration of trusts.~The trusts must be declared at the time of the execution of the assignment ; they must ac- company the instrument or appear on its face. Grover v. WaTce- man, 11 Wend. 187 ; AveriU v. Zoucks, 6 Barb. 470 ; /Shel- don V. Dodge, 4 Den. 217 ; Kercheis v. Schloss, 49 How. Pr. 284. The assignment must itself fix and determine the rights of creditors in the assigned property, and not reserve to the as- signors, or to the assignee, tlie power of subsequently doing so. Kercheis v. ISchloss, 49 How. Pr. 284 ; Eiggs v. Murray, 2 Johns. Ch. 565. Thus an assignment in which preferences are giv^en to persons who are not creditors of the assignor, upon a verbal trust for real creditors, is void as matter of law. Frazier v. Trum. A right of action against a common carrier to recover the value of property intrusted to him is assignable, and the assignee may sue in his own name. Merrill v. Grinnell, 30 N. Y. 594 ; McKee v. JwM, 12 N. Y. 622 ; and Waldron v. Willard, 17 N. Y. 466. Where the assignncient is general and includes all the assignor's estate, in the absence of fraud the assignee, except as stated in the following section, takes only such rights and interests as the debtor himself had or could assert at the time of making the as- signment. He is subject to all the equities which the assignor himself would be subject to. Van Heusen v. Radcliff, 17 N. Y. 580 ; Warren v. JFenn, 28 Barb. 333 ; Maas v. Ooodman, 2 Hilt. 275 ; Reed v. Sands, 37 Barb. 185 ; Addison v. Burck- myer, 4 Sandf. Ch. 498. As to construction of the language of the transfer, see ante. Chap. IX. § 156. Property fraudulently transferred.— In one instance only does the assignee acquire the right to set up a claim which the assignor himself could not maintain. It is provided by statute, " that any executor, administrator, receiver, assignee, or other trustee of an estate, or the property and effects of an in- solvent estate, corporation, association, partnership or individual, may for the benefit of creditors or others interested in the estate or property so held in trust, disaffirm, treat as void, and resist all acts done, transfers, and agreements made, in fraud of the rights of any creditor, including themselves and others, interested in any estate or property held by or of right belonging to any such trustee or estate. And any creditor of a deceased insolvent debtor, having a claim or demand against the estate of such deceased debtor ex- ceeding in amount the sum of one hundred dollars, may, in like 176 GESfEEAL ASSIGNMENTS. [CH. X. manner, for the benefit of himself and other creditors interested in the estate or property of such deceased debtor, disaffirm, treat as void, and resist all acts done, and conveyances, transfers and agreements made, in fraud of the right of any creditor or cred- itors, by such deceased debtor, and for that purpose may main- tain any necessary action to set aside such acts, conveyances, transfers or agreements ; and for the purpose of maintaining sucli action, it shall not be necessary for such creditor to have obtained a judgment upon his claim or demand, but such claim or demand, if disputed, may be proved and established upon the trial of such action." Laws of 1858, c. 314, § 1 ; amended Laws of 1889, c. 487 ; 2 Birdseye's St., p. 1232. By another section it is also provided : " That every person who shall, in fraud of the rights of creditors and others, have received, taken, or in any manner interfered with, the estate, property or effects of any deceased person, or insolvent corpora- tion, association, partnership or individual, shall be liable in the proper action to the executors, administrators, receivers, or other trustees of such estate or property, for the same, or the value of any property or efifects so received or taken, and for all damages caused by such acts to any such trnst estate." Laws of 1858, c. 314, § 2 ; 2 Birdseye's St., p. 1232. Previous to this enactment Chan. Kent, in Bayard v. Hoff- tncm (4 Johns. Ch. 450), sustained a suit by the voluntary as- signees of an insolvent debtor to reach property which had been previously disposed of by the assignors in fraud of the rights of creditors, but this case was disapproved by Chan. Walworth, in Brownell v. Curtis (10 Paige, 210, 218). And in accordance with the doctrine of the last case, it was held that where an insolvent debtor, on the eve of making a general assignment, transferred in trust for the benefit of certain of his creditors, a bond and mortgage which were not payable until about four years thereafter, and the transfer contained a proviso that the assignee should retain the bond and mortgage until the expiration of the period it had to mature, and should not part with it, nor attempt to collect the principal until that time, that the transfer was fraudulent as against creditors, and that being valid against the assignor, it did not pass by his general assignment made a few days subsequently. Storm v. § 156.] PROPERTY FRAUDULENTLY TRANSFERRED. 177 Davenport, 1 Sandf. Oh. 133. See also Leaoh v. Kelsey, 7 Barb. 466. An assignee acquires no right to avoid a previous voluntary or fraudulent conveyance by virtue of any title, interest, or right of action derived through the assignment from the assignee, but his right to maintain an action to set aside previous fraudulent transfers is conferred solely by the statute. Under the act of 1858, the assignee has ample power, and it is his duty to attack any conveyance made in fraud of creditors, and to reach the property fraudulently disposed of or concealed. Miller v. Halsey, 4 Abb. Pr. JST. S. 28, 33 ; Southard v. Benner, 72 N. Y. 424 ; Spring v. Short, 90 N. Y. 538 ; Loos v. Wil- kinson, 110 N. Y. 195 ; Spelman v. Freedman, 130 N. Y. 421 ; Ball V. Slafter, 33 Supm. Ct. (26 Hun), 353 ; Grouse v. Froth- ingham, 97 N. Y. 105, 113 ; Fort Stanwix Bank v. Leggett, 61 N. Y. 552 ; Taft v. Wright, 2 T. & 0. 614, 618 ; Matter of Raymond, 34 Supm. Ct. (27 Hun), 508 ; Blaut v. Gahler, 77 N. Y 461 ; s. c. 19 Alb. L. J. 498. Further observations upon these cases and upon the rights of the assignee to maintain actions and defenses on the ground of the fraudulent character of transfers made by the assignee, will be reserved for discussion when we treat of the rights and powers of assignees. See Chap. XXI. A distinction is to be observed between a conveyance by the debtor fraudulent as to creditors, because made with the intent to hinder, delay and defraud them, and a conveyance obtained from the debtor by fraud and trick. In the former case, the conveyance is good as against the assignor, and apart from the statute his assignee can obtain no better title than the assignor himself had (see post, Chap. XIII), but in the latter case the imposition and fraud would have furnished a ground for the as- signor himself to apply to a court of equity for relief, and this right follows the property into the hands of an assignee for cred- itors. The case of McMahon v. Allen (35 N. Y. 403 ; more fully, 32 How. Pr. 313 ; rev'g 34 Barb. 56 ; 12 Abb. Fr. 275), is an extremely instructive and interesting case in this connection. In that case a transfer of property, real and personal, was ob- tained fraudulently and inequitably, by false representations 12 178 GENERAL ASSIGNMENTS. [cH. X. made by the transferee to the tranferrer, by abuse of a fiduciary relationship and by practice upon a reckless and improvident sailor. The tranferrer subsequently made a conveyance of all his property and causes of action to an assignee, for the benefit of his creditors. The question was whether the assignee could maintain an action to set aside the previous conveyance as having been fraudulently and inequitably obtained, and by an abuse of a fiduciary relationship. The Court of Appeals were unani- mously of opinion that the action could be maintained. The conveyances in that case were made previous to the act of 1858. And the decision was placed upon the ground not of fraud against creditors, but of imposition and fraud upon the assignor. The cases relied upon were Dickinson v. Burrell, L. R. 1 Eq. 337 ; Oneida Bwnk v. Ontario Banh, 21 N. Y. 490 ; Iracy v. Tahnage, 14 N. Y. 162 ; Waldron v. Willard, 17 N. Y. 466. The assignee does not succeed to a right of action to compel specific performance of a contract, the only result of which will be to relieve the assignor from a personal liability. Williams v. Boyle, 1 Misc. 364 ; s. c. 48 State R. 713. I 157. Property held in trust.— Property held in trust by the debtor does not pass to his assignee under the assignment, and if the property consists of goods remaining in specie or of notes and other choses in action, the cestui que trust is entitled to the property, and not the creditors at large. Equity will follow trust funds through any number of transmutations, and preserve it for the cestui que trust so long as it can be identified. Kif v. Banli- of New York, 10 Johns. 63 ; Newton v. Porter, 69 N. Y. 133. See Holmes v. Oilman, 138 N. Y. 369 ; rev'g 71 Supm. Ct. (64 Hun), 227 ; affi'g Holmes v. Davenport, 27 Abb. N. C. 341 ; Denton v. Merrill, 50 Supm. Ct. (43 Hun), 224 ; s. c. 5 State R. 387. Even when the specific thing or the specific proceeds cannot be identified, " it may be sufficient to entitle a party to equitable preference in the distribution of a fund in insolvency, that it appears that the fund or property of the insol- vent remaining for distribution, includes the proceeds of the trust estate." Matter of Cavin v. Gleason, 105 N. Y. 256, 262. It must be made to appear that the avails of the trust property have in some form come into the hands of the assignee before any § 157.] PROPERTY HELD IN TRUST. 179 preference in the assig;ned estate can be maintained by the cestui que trusts This is illustrated by the case last cited. In that case certain securities were left with the assignor, a broker, to sell and invest in a mortgage. The assignor realized on the securities $3000, and disposed of the entire sura with the excep- tion of $30, and then made a general assignment. It was held that the owner of the securities had no prior right of payment out of the general assets of the assignor, and that a direction to the assignee to pay over to the creditor any larger sum than the $30 which he had received from the speciiic property was im- proper. This case is said to have overruled People v. City Bcmh of Bochester, 96 N. Y. 32 (see National B. c& D. Bank v. Wilkinson, 10 State R. 290), but is not necessarily inconsistent with it. In the Rochester Bank Case, a person who had dis- counted his notes with the bank sent to it his checks to take up the notes. The notes had been sold by the bank, and the checks were converted into cash and were not used to take up the notes. Upon the insolvency of the bank the receiver found cash on hand in excess of the amount of the checks. It was held that the drawers of the checks were entitled to priority of payment. It ' To the same effect are Ferclien v. Arndt, 37 Pac. R. 161 ; Little v. Cliad- wick, 151 Mass. 109 ; Englar v. Offutt, 70 Md. 78 ; TTiompson's Appeal, 22 Penn. St. 16 ; Columbian Bank's Estate, 147 Penn. St. 422 ; Slwrwood v. Milford State Bank, 94 Mich. 78 ; Nat. Bank v. Ins. Co. 104 U. S. 54 ; Union Nat. Bank v. Goetz, 138 111. 137 ; Goodell v. Back, 67 Me. 514 ; Nonotuck Silk Co. V. Flanders, 58 N. W. 388. Mr. Justice Bradley, in Frelinghuysen v. Nugent, 36 Fed. Rep. 329, 239, says : " Formerly the equitable right of following misapplied money or other property into the hands of the parties receiving it, depended upon the ability of identifying it ; the equity attaching only to the very property misapplied. This right was first extended to the proceeds of the property — namely, to that which was procured in place of it by exchange, purchase, or sale. But if it become confused with other property of the same kind, so as not to be dis- tinguishable, without any fault on the part of the possessor, the equity was lost. Finally, however, it has been held as the better doctrine that confusion does not destroy the equity entirely, but converts it into a chai-ge upon the entire mass, giving to the party injured by the unlawful diversion a priority of right over the other creditors of the possessor. This is as far as the rule has been carried. The difficulty of sustaining the claim in the present case is that it does not appear that the goods claimed— that is to say, the stock on hand, finished and unfinished — were either in whole or in part the proceeds of any money unlawfully abstracted from the bank." See Peters v. Bain, 138 U. S. 670. 180 GENERAL ASSIGNMENTS. [CH. X. was not claimed that the proceeds of the checks had not gone into the general funds of the bank, or that they had not passed in some form to the receiver. Matter of Gavin v. Gleason, supra, p. 263. The general principle is illustrated also by a variety of eases, where banks and bankers, to whom drafts, notes, and checks have been forwarded for collection, have failed before paying over the proceeds of the collections. Thus, in I^at. Butchers da D. Bank v. Eubbell, 117 N. Y. 3S4, where drafts and notes had been sent to the assignors for collection by a customer, under a course of dealing in which the assignor credited the customer with the proceeds of collection and remitted weekly, it was held that, as to the amounts collected and nsed by the assignors before the assignment, the customer was entitled to no priority, but as to the avails collected after the assignment, the assignee must account to the customer, although he had paid out preferences under the assignments which exhausted his receipts. The cases of Arnot v. Bingham, 62 Supm. Ct. (55 Hun), 553, and Franh v. Bingharn, 65 Supm. Ct. (58 Hun), 580, which grew out of the failure of the First Nat. Bank of Dansville, serve to illustrate that the avails of the collection must have come into the hands of the receiver or assignee before an equitable preference can be secured by the owner of the securities. Where an administrator deposited certain securities with both sureties on his administration bond for their protection, which they afterward sold and the proceeds of which they appropriated to their own use, and then made a general assignment, it was held that the assets in the hands of the assignee being increased to the amount of the funds so appropriated, was properly charge- able therewith in favor of the representatives of the estate. Mat- ter ofMumford, 5 State R. 303. See Rabel v. Griffin, 12 Daly, 24:1 ; Hooley v. Gieve, 9 Daly, 104 ; affi'd, 82 N. Y. 625 ; and see note to this case, 9 Abb. N. C. 41. See also note on com- mingling trust funds, 17 Abb. N. C. 100. § 158. Property transferred by previous assignment.— The assignment of a chose in action will prevent its passing to as- signees in virtue of a subsequent general assignment by the same assignor under the bankrupt or insolvent acts ; and this without § 159.] EIGHTS SUBSEQUENTLY ACCEUING. 181 notice to the debtor or subsequent assignees. Muir v. Schenok, 3 Hill, 228. So a claim transferred by a previous general assignment for the benefit of creditors will not pass to a trustee to whom an as- signment is subsequently made under the insolvent act. Hop- Tcins V. Banks, 1 Cow. 650. Where a debtor, residing in Pennsylvania, to whom a mort- gage upon land in this State had been given, delivered the mort- gage over, so as to pass the equitable interest in it to another, and then executed an assignment under the insolvent laws of Pennsylvania, it was determined that no interest in the mortgage passed to the assignee under that assignment. Horford v. Nichols, 1 Paige, 220. § 159. Rights subsequently accruing. — Where a general as- signment was dated and acknowledged on the 25th day of Feb- ruary, 1876, but was not delivered to the assignee until the 13th day of May, 1876, held that a cause of action accruing to the assignor for services performed between the dates above stated did not pass to the assignee. Crow v. Oolton, 7 Daly, 52. Where property of the assignor has been forfeited to the United States before it came into the control of the assignee for the benefit of creditors, a subsequent remission of the forfeiture and an order for the payment to the owners of a part of the avails of the property, will not inure to the benefit of the as- signee. Ward V. Webster, 9 Daly, 1 82. In the case of Taft v. Marsily, 120 N. Y. 474 ; affi'g 54 Snpm. Ct. (47 Hun), 175, it was held that a claim for enhanced premiums of insurance, payable under the Act of Congress for the distribution of the " Geneva Award," was not assignable, and did Jiot pass to an assignee in bankruptcy, for the reason that no legal claim existed in favor of such claimants, and the distribution in favor of such claim was a gratuity. Indemnity for loss or injury caused by the foreign government is not, how- ever, bounty, but is a property right, and the award in such cases is capable of assignment. Comegys y. Yasse, 1 Pet. 193 ; Bachmom, v. Lawson, 109 U. S. 659 ; Phelps v. McDonald, 99 IJ. S. 298 ; Leonard v. Nye, 125 Mass. 455 ; Heard v. Sturgis, 146 Maes. 545. 182 GENERAL ASSIGNMENTS. [CH. X. § l6o. Money in bank. — A general assignment of all a debtor's property passes a deposit to his credit in a bank, and carries to the assignee all the right which the depositor had in the deposit at the date of the assignment ; and the bank has no lien in such a case upon the deposit for the amount of a bill of exchange in- dorsed by the depositor and discounted by the bank, but which bill has not yet matured. Beckwiih v. Union Bank,, 9 N. Y. 211 ; affi'g 4 Sandf. 604 ; see" Coates v. First Nat. Bank, 47 Super. Ct. (15 J. & S.), 322 ; Lawrence v. Bank of Eepiiblic, 35 N. y. 320. If § i6i. Property in transit. — An assignment of all the debtor's goods and chattels, wares and merchandise, rights, credits, notes, accounts, and demands," does not pass his interest in a sum of money borrowed by him, and then in course of trans- mission to him from tlie lender. Sheldon v. Dodge, 4 Den. 217. So when parties being insolvent purchased a quantity of whisky on a credit of five months, and on the day the goods were shipped the purchasers made a general assignment, it was held that the assignee acquired no title to the whisky, which arrived several days after the execution of the assignment, and tiie assignee having sold it, was held liable for conversion. Lacker v. Rhoades, 51 N. Y. dil ; rev'g 45 Barb. 499. But where the assignor had ordered certain goods to be manu- factured for liim in England, previous to executing the assign- ment, and the goods arrived here subsequent to the assignment, it was held that the assignee had his election to accept the goods and pay the contract price, or to refuse to accept them ; and having accepted them, his title was good against a levy made by the sheriff on an execution against the assignor. Yan Dine v. Willett, 38 Barb. 319. When the assignor purchases goods which arrive when he is on the point of making an assignment, and therefore informs the seller pf his condition, and declines to receive the goods, and afterward assigns, the assignee cannot successfully claim title to the goods. FJynn v. Ledger, 55 Supm. Ct. (48 Hun), 465. Property in transit, which is subject to the vendor's right of stoppage in transitu, passes to the assignee, subject to the same rights which the vendor would have against the assignee, inas- §§ 162, 163.] CONSIGNED GOODS. 183 much as the voluutary assignee is not to be regarded as a hona fide purchaser for value. See note on stoppage in transit, post, Chap. XX. § 162. Trade-mark — Fixtures. — It was held in the Matter of Knox, 1 Mon. L. B. 47, that a trade-mark belonging to the assignor passes under the assignment, a,nd may be disposed of as other assets. Whether such is the effect of the assignment was questioned, but not decided, in Milliken v. Dart, 33 Supm. Ct. (26 Run), 24. See Hegefnan v. Hegeman, 8 Daly, 6. See Hehnhold v. Helmbold Mfg. Co., 53 How. Pr. 453 ; Bradley v. Norton, 33 Conn. 157 ; Warren v. Warren Thread Co. 134 Mass. 247. As between the general assignee of the mortgagor and a mort- gagee claiming certain property as fixtures, the assignee stands in the position of the mortgagor. Wells v. Maples, 22 Supm. Ct. (15 Hun), 90. § 163. Consigned goods. — When an assignment is made by a commission merchant or one having goods on consignment, the question may arise how far the principal or the owner of the consigned goods has a prior right of payment out of the proceeds of the assigned estate. " The relation between a commission agent for the sale of goods and his principal is fiduciary. The title to the goods until sold remains in the principal, and when sold, the pro- ceeds, whether in the form of money,-or notes, or other securities, belong to him, subject to the lien of the commission agent for advances and other charges. The agent holds the goods and the proceeds upon an implied trust to dispose of the goods according to the directions of the principal, and to account for, and pay over to him the proceeds from sales," Andrews, J. Baiter v. N. Y. Nat, Exch. Bh., 100 N. Y. 31, 33. The inquiry in every case is whether the relation between the parties has been modified by express agreement or by the course of business, so that it has ceased to be fiduciary and has become that of debtor and creditor. Gindre v. Kean (Cora. Pleas), 7 Misc. 582 ; s. 0. 58 State R. 505 ; Wallace v. Castle, 21 Supm. Ct. (14 Hun), 106 ; Converseville Co. v. Ohamhef'sburg Woolen Co. Ibid. 609 ; Standard Wagon Co. v. Nichols, 48 Supm. Ct. (41 Huii), 184 GENERAL ASSIGNMENTS. [CH. X. 261 ; Donovan v. Cornell, 3 How. Pr. N. S." 525 ; Springville Mfg. Co. V. Lincoln, 16 Dalj, 318 ; s. c 32 State R. 668. The fact that the factor is acting under a del credere commission does not necessarily destroy the fiduciary relation. Wallace v. Castle, 21 Supm. Ot. (14 Hun), 106 ; Converseville Co. v. Cham- hersburg Woolen Co. Ibid. 609 ; Oindre v. Kean, 7 Misc. 582. Where the proceeds of the consigned goods can be traced, as, for instance, debts due from purchasers of the consigned goods, they may be reached by the principal in the hands of the assignee. Converseville Co. v. Chambersburg Woolen Co., supra ; McDon- ald V. Bayne, 36 State R. 203; s. o. 12 N. Y. Supp. 772; Bertha Zinc & M. Co. v. Clute, 57 State R. 70 ; s. c. 7 Misc. 123. And when the proceeds of the consigned goods have been com- mingled with the funds of the assignor, it has been held that the whole body of the assets received by the assignee are changed, with a lien in favor of the consignors to the amount of such pro- ceeds {Standard Wagon Co. v. Nichols, 48 Supm. Ct. [41 Hun], 261), but the same rule doubtless applies as that which obtains as to trust property generally — to wit, that the proceeds in some form must have come into the hands of the assignee. § 164. Consigned goods — continued. — Wherever a commis- sion merchant or factor receives the goods of his principal with the understanding that he is to sell the goods, of divers con- signors, and take in payment one security or one sum for the goods of several principals,* with the right to deposit the money and use the security as his own, and pay the consignors as gen- eral creditors and not as principals having a right each to the proceeds of his own goods, the consignor cannot follow the proceeds of his goods in the hands of the assignee, nor has his claim any superiority to those of ordinary creditors. Matter of Kobbe, 10 Daly, 42. And in analogy to this principle it was held, that where a party agreed to make certain advances to a manufacturer, and took an agreement by which the manufacturer agreed that the amount of such advances should be a prior lien upon manufactured goods and goods in process of manufacture, being in the nature of a continuing security for future advances upon goods to be manufactured, it was held that the party mak- ing the advances had no prior lien upon the proceeds of the § 165.] STOCKS HELD ON MARGIN. 185 goods in the hands of an assignee for the benefit of creditors. Person v. Oherteuffer, 59 How. Pr. 339. When the goods of the principal or their proceeds are distinguishable in the hands of the assignee the principal may reach them. Con- verseville Co. v. Ghamhershurg Woolen Co. 21 Supm. Ct. (14 Hun), 609 ; Matter of Kobhe, supra. A principal will estop himself from claiming the proceeds of his goods by presenting to the assignee a demand in the ordinary form of a creditor's claim, and accepting a dividend thereon. If the assignee pays out the fund in dividends the principal cannot make claim to any portion of the fund so paid out, and hold the assignee for a mis- appropriation. Matter of Kohhe, 10 Daly, 42. The assignee of a factor is under the same obligation to restore to a consignor the proceeds of his goods which are distinguishable as the factor himself. FrancTtlyn v. Sprague, 17 Supra. Ct. (10 Hun), 589. The assignee, however, is entitled to retain in his hands the proceeds of goods sold hy the factor, nntil the notes or acceptances by the factor are paid or canceled. Franck- lyn V. Sprague, supra ; Addison, v. Burclcmeyer, 4 Sandf. Ch. 498. § 165. Stocks held on margin.— In SiUcocks v. Gallaudet, 73 Supm. Ct. (66 Hun), 522, a firm of brokers made an assign- ment, and among their assets were certain stocks which they had bought and were carrying for customers on margin, and there were also certain stocks which custohaers had placed in their hands as collateral for their operations. The brokers themselves owned no stocks. All that they held belonged to customers, for whom they were carrying them on a margin, and they had all been pledged by the brokers. The plaintiff claimed to be able to trace certain stocks which were pledged as having been bought for him. It was held that the plaintiff had no superior equity ; that all the stocks held on a margin having been purchased and disposed of in the same way, no priority arose from the fact that one creditor could identify his while another could not. As to the stock deposited as security, and which had been wrongfully pledged, it was held that the owner was entitled to a priority out of the proceeds of the collateral sold after payment of the pledge. 186 GENERAL ASSIGNMENTS. [CH. X. So where a stock broker having securities of his customers in iiis possession pledged thena to secure his own debt, and the securities were sold by the pledgee, thus diminishing his claim upon other securities, the proceeds of which came to the assignee, it was held that the fund so received by the assignee was im- pressed with an equity in favor of the owner of the securities wrongfully pledged. Matter of Smyth, 2 How. Pr. N". S. 431 ; affi'd at Gen. Term, 48 Supm. Ct. (41 Hun), 639 ; s. c. 24 Weekly JJig. 217 ; Ct. of App. 105 N. Y. 619. See Powers v. Savin, 71 Supm. Ct. (64 Hun), 560. § l66. Judgments.— By § 1263 of the Code of Civ. Pro., a resident of the State, or a person having an office within the State for the regular transaction of business in person, who be- comes the owner of a judgment by virtue of a general assign- ment for the benefit of creditors, of an appointment as a receiver or trustee or assignee, of an insolvent debtor or bankrupt, may file with the clerk in whose office the judgment roll is filed, a notice of the assignment or of his appointment and of his owner- ship of the judgment. The notice must be subscribed by him, adding to his signature his place of residence, and also, if he re- sides without the State, his office address. A notice so tiled has the same force and effect for the purpose of article third, of title one, of chapter eleventh, of the Code of Civ. Pro., as if it was an assignment of the judgment. An assignment which in terms conveys all the debtor's prop- erty includes a judgment which he owns, although it is not in- cluded in the inventory, and is, in fact, unknown to the assignor, and when by subsequent conveyance the assignee assigns all claims, judgments, and evidences of debt, such assignment will pass title to the judgment. Emigrant Ind. Sav^gs Bank v. Roche, 93 N. Y. 374. § 167. Claims against the United States.-— An act of Con- gress (U. S. R. S. § 3477) renders void all transfers and assign- ments of claims upon the United States, unless executed in the presence of at least two witnesses, after the allowance of the claim and the issuing of a warrant therefor. This enactment has not been regarded as including such assignments or transfers §§168,169.] wife's DOWER AND SEPARATE PROPERTY. 187 as are made by operation of law, and for that reason thej do not include the transmission of claims of heirs, devisees and assignees in bankruptcy {Erwin v. U. S. 97 U. S. 392), and for similar reasons it has been held not to include a general as- signment for the benefit of creditors. Goodman y. JViblaGk, 102 U. S. 556 ; Stanford v. Zookwood, 95 N. Y. 582 ; 31 Supra. Ct. (24 Hun), 291. § l68. Real property. — Where land is to be conveyed, the as- signment should be executed with the formalities of a deed of conveyance ; it should be under seal and should be recorded as a conveyance, otherwise it will not be notice to subsequent pur- chasers and incumbrances. Simon V. Kaliske, 6 Abb. Pr. N. S. 224 ; s. c. 37 How. Pr. 249. Land passes by a general assignment under the insolvent act, and a creditor whose judgment against the insolvent is perfected after the assignment has no lien, and therefore cannot redeem within the act. Marsh v. Wendover, 3 Oow. 69. A general assignment which conveys all real estate of the grantor in a specified town, and all leases and reservations and rents thereof issuing therefrom, together with all debts due for rents of land in said town, passes to the assignee the covenants, conditions, or right of entry contained in a lease in fee. Main v. Green, 32 Barb. 448. A general designation in the assignment of all the property of the assignor, real and personal, will pass title to land {Raynar v. Saynor, 28 Supm. Ct. [21 Hun], 36) ; but when the convey- ance was of all the debtor's property of every kind, personal and mixed, it was held that these words limited the conveyance to personal estate. Rhoads v. Blatt, 16 N. B. R. 32 ; see also Price V. Haynes, 37 Mich. 487 ; s. c. 1 Am. Insol. R. 137. Where under a verbal agreement to share the profits and losses of the sale of lands standing in the name of an assignor he be- comes entitled to recover under the agreement for a share of the losses, this claim passes to the assignee. Babcock v. Read, 50 Super. Ct. (18 J. & S.) 126. § 169. Wife's dower and separate property. — Unless the wife voluntarily relinquishes her right of dower in real estate 188 GENERAL ASSIGNMENTS. [CH. X. assigned by her husband, the assignee will take the land subject to that right {Dimon v. Delmonico, 35 Barb. 554), and she will be entitled to her dower in any surplus which may come into the hands of the assignee after foreclosure. Mathews v. Duryee, 3 Abb. Dec. 220 ; s. o. 4 Keyes, 525 ; affi'g 45 Barb. 69 ; s. o. 17 Abb. Pr. 256. When the wife intends to convey her right of dower, it may be done by deeds of conveyance ancillary to the assignment executed by her husband and herself. Darling v. JRogers, 22 Wend. 483. A wife takes dower in the surplus after foreclosure and sale of real estate fraudulently assigned by her husband. N. T. Life Ins. Co. v. Mayer, 19 Abb. N. C. 92. Previous to the married woman's acts, an assignment by the husband under the insolvent act vested in the assignee the per- sonal estate of the wife, unless the same was secured to her as her separate property. But the assignee took the legal interest in the same, subject to the wife's right of survivorship, if the husband died before the assignee has reduced such property to possession. The assignee also took the assignment of the wife's estate in action, subject to her equitable claim thereon, for the support of herself and her infant children, if she had no other sufiScient means for that purpose, provided such claim was assert- ed by the wife, or there is a suit instituted in this court for the recovery of such property before the assignee has reduced it to possession. Van Epjps v. Yan Dusen, 4 Paige, 63, 74. § 169a. Interests of devisees. — A devisee of real estate, who was also the recipient of personal property under the will, which was charged with the payment of debts, assigned " all his share and claim in and to the personal estate of the testator, and in and to all moneys which then were or thereafter might come into the hands of the executors, arising from any property or estate of the testator." Previous to the assignment the execu- tors sold a portion of the real estate devised, under a surrogate's order, for the payment of debts, by reason of a deficiency of personal estate. The executors discovered and received other assets after the assignment. It was held that the equitable right of such devisee, to be indemnified for the sale of his real estate out of assets and moneys subsequently discovered and received by the executors, passed to the assignee, although not specially § 170.] LEASEHOLD PEOPEKTT. 189 mentioned in the assignment, and although it did not appear that the assignor knew of the fund in question. Couch v. Dela- plaine, 2 N. Y. 397 ; and see Brown v. Pease, 6 State R. 191. § 170. Leasehold property. — The question whether leasehold property passes under the assignment to the assignee, is one of importance to the assignee, for if he become the assignee of the lease, he will be bound by all its covenants and conditions, and will therefore become liable for the payment of the rent. The liability of an assignee for rent will be considered in its appropri- ate place, Ipost, § 330. The inquiry at present is under what circumstances the leasehold property passes to him. It seems to be now definitely settled, that assignees under a general assign- ment, like assignees in bankruptcy, are not bound to accept prop- erty which is not valuable to the estate, and that consequently they have an election whether to accept leasehold property bur- dened with the payment of the rent, or to reject it. Copeland v. Stephens, 1 Barn. & Aid. 593 ; Carter v. Warne, 4 Car. & Pay. 191 ; Pratt v. Levam,, 1 Miles (Penn.), 358 ; Journeay v. Brackley, 1 Hilt. 447 ; Stinemets v. AinsUe, 4 Den. 573 ; Mar- tin V. Black, 9 Paige, 641 ; Mc Adam's Landlord and Tenant (2ded.), 281. If the conveyance of the debtor's property is in general terms, without any special designation of the lease, the lease will be deemed property passing under the assignment or not, at the election of the assignee, until he enters under it or, by some other act or omission to act, determines his right to elect. *Car- ter V. Hammett, 12 Barb. 253, 263 ; Bagley v. Freeman, 1 Hilt. 196 ; Dennistoun v. MuHbell, 10 Bosw. 155 ; Jones v. Idaus- mann, Id. 168 ; Lewis v. Burr, 8 Id. 140 ; Foster v. Oldham, 53 State R. 488. When the assignment was silent as to the lease, but the assignee knew of it before accepting the trust, and took possession of the premises and carried on the assignor's business for three months, this was held to have entered an acceptance of the lease as mat- ter of law. Myers v. Himt, 8 State R. 338. But when the assignee refused to assume the lease, but made an offer for tem- porary possession, which was not accepted, the parties not being able to agree upon tlie rent, after which he remained in posses- 190 GENERAL ASSIGNMENTS. [cH. X. sion for two months, it was lield that the assignee had not as- sumed the lease, but was merely a tenant by sufferance. Weil v. McDonald, 21 Wkly. Dig. 440. See also /Stephens v. Stein, 30 State K. 391. But it seems that if the lease is specifically mentioned in the assignment, or there are apt words of conveyance of leasehold property, and the assignee knows of the existence of the lease, the acceptance of the assignment will amount presumptively to an acceptance of the lease. Astor v. Lent, 6 Bosw. 612 ; Young v. Peyser, 3 Bosw. 308 ; Bagley v. Freeman, 1 Hilt. 196 ; see Morton v. Pinckney, 8 Bosw. 135 ; Powers v. Car- penter, 15 Weekly Dig. 155. A conveyance of all other real and personal property and estate, whatever and wherever situate, and all interest therein, is sufficiently comprehensive to include the interest of the as- signee of a lease equitably assigned. Astor v. Lent, 6 Bosw. 612. If the assignee accepts the assignor's lease, he may be re- moved in summary proceedings for non-payment of rent. Mas- brouck V. Stokes, 13 N. Y. Supp. 333. § 171. Exemptions. — The debtor may lawfully except from the operation of the assignment, property which is by law ex- empt from levy and sale under execution. Dow v. Plainer, 16 IST. Y. 562 ; Dolson v. Kerr, 12 Snpm. Ct. E. (5 Hun), 643 ; Beckman v. Messinger, 49 Penn. St. 465 ; Baldwin v. Peet, 22 Tex. 708 ; Oarnor v. Frederick, 18 Ind. 507 ; Smith v. Mitchell, 12 Mich. 180 ; Farquharson v. McDonald, 2 Heisk. (Tenn.) 404. As to the necessity of specifically describing the property exempt, see cases in other States, collected in note to Lawrence v. Norton, 22 Am. L. Keg. N. S. 264, 265. In the earlier cases in this State, it was at one time held that the reser- vation of a sum of money to be paid to the assignors for their maintenance, would be sustained. Murray v. Biggs, 15 Johns. 671 ; s. c. 2 Johns. Ch. 565 ; Austin v. Bell, 20 Johns. 442. But this doctrine has been distinctly and emphatically overruled. Goodrich v. Downs, 6 Hill, 438, 440 ; Orover v. Wakema/ii, 11 Wend. 187 ; Butler v. Van Wyck, 1 Hill, 438, 463 ; Mackie v. Cairns, 5 Cow. 547, 584 ; White v. Fagan, 18 Weekly Dig. 358. § 171.] EXEMPTIONS. 191 And it; is now the settled law of this State, that the property covered by the assignment must be unreservedly applied to the benefit of creditors. Machie v. Cairns^ 5 Cow. 547, 584 ; Ciirrie v. Hart, 2 Sandf. Ch. 353. But it does not necessarily follow that all the debtor's prop- erty must be included in the assignment, if the property not in- cluded is left open to creditors. Thus, an assignment which ex- pressly excepted a claim then in suit, was held not to create a reservation for the ease, advantage or benefit of the assignor. Carpenter v. Underwood, 19 -N". Y. 520. If a debtor in failing circumstances makes an assignment of his property for the benefit of a part of his creditors only, and the value of the property assigned is more than could have been supposed necessary to satisfy the claims of those creditors, fraud may be inferred from that circumstance alone, unless a satisfac- tory excuse is shown for the transfer of the excess. Chan. Wal- worth, in Beck v. Burdett, 1 Paige, 805, 309 ; see Butler v. Stoddard, 7 Paige, 163. CHAPTER XI. PREFERENCES. § 172. In general. — It cannot be doubted that, in the absence of a bankrupt law or some statutory inhibition, a debtor while he is administering his own affairs may honestly prefer the pay- ment of one debt to another. He may indeed apply all his prop- erty to the payment of one debt, if the debt be one for which he is justly liable, and the property be no more than sufficient to pay it without the imputation of fraud. Archer v. O'Brien,, li Supm. Ct. (7 Hun), 146 ; Aiiburn Ex. BanTc v. Fitch, 48 Barb. 344 ; Carpenter v. Muren, 42 Id. 300 ; Leavitt v. Blatchford, 17 N. Y. 521 ; Woodworth v. Sweet, 51 N. Y. 8 ; Hall V. Arnold, 15 Barb. 599, 600 ; Wateriury v. Sturtevant, 18 Wend. 353 ; HUl v. Northrop, 9 How. Pr. 525 ; Williams v. Brown, 4 Johns. Ch. 682 ; Jewett v. Noteware, 37 Supm. Ct. (30 Hun), 192 ; Spaiilding v. Strang, 37 IST. Y. 135 ; Stanley v. Nat. Union Bank, 115 N. Y. 122 ; Jewell v. Knight, 123 U. S. 426 ; Bishop v. SteUins, 48 Supm. Ct. (41 Hun), 243. The law on this subject is forcibly expressed by Mr. Justice E. Dar- win Smith, in the following language : "A man may at all times convey or turn out his property in payment of his just debts ; and this is none the less true, because he is straitened in his circumstances, and unable to pay all his creditors. At such times he may honestly prefer one creditor to another, and if he sells and conveys his property for a fair price in payment of just debts, no one can (j[ue8tion the legality of the conveyance or transfer. There is, there can be, no fraud in such a transaction. Fraud cannot be predicated upon it, on the assumption that the debtor meant to defraud his creditors. There is no fraud in the case, if the property in fact goes to pay and satisfy an honest debt." E. D. Smith, J., in Auburn Exchange Bank v. Fitch, 48 Barb. 344, 353 ; see Laidlaw v. Oilmore, 47 How. Pr. 67. And where the conveyance is directly to a creditor in consid- § 173.] PKEFERENCES. 193 eration of a previous valid iudebtedness, it is not repugnant to the statute of frauds as being a voluntary coQveyance. It is not necessary that the creditor should show any new consideration, for the obvious reason that his equity, at the time of the trans- fer, was the same as that of all other creditors, and he is entitled to the benefit of the universal rule, that when the equities are equal the legal title will prevail. Seymour v. Wilson, 19 N. Y. 417, 421 ; Archer v. O'Brien, 14 Supm. Ct. (7 Hun), 146 ; see Towsley v. McDonald, 32 Barb. 604. And the transfer will be sustained although the debtor de- signed and iatended to prevent some other creditor from taking the property. Hall v. Arnold, 15 Barb. 599 ; Jewett v. Note- ware, 36 Supm. Ct. (30 Hun), 192, 194. Nor is the payment or transfer any the less valid because the creditor is acquainted with the insolvent condition of the debtor. Indeed, it has been said that " the creditor, when he discovers circumstances which would put a prudent man on inquiry, should, in the preservation of his own rights, seek the payment of his debt, the protection of his property. Such a course is not only consistent with honesty, but is a duty which he owes to himself, the observation of which is sanctioned by the rules of law authorizing the preference which he obtains." Mr. Justice Brady, in Archer v. O'Brien, 14 Supm. Ct. (7 Hun), 146, 149 ; E(de V. Sttwart, 14 Supm. Ct. (7 Hun), 591 ; Bel Valle v. Hyland, 83 Supm. Ct. (76 Hun), 493. So a debtor, after a verdict against him, and previous to the entry of a judgment thereon, may lawfully give a preference to a creditor, by conveying to him real estate in satisfaction of a ionafide debt, and thus prevent the attachment of a lien upon the real estate, by virtue of a judgment entered upon the ver- dict. Waterbury v. Sturtevant, 18 Wend. 353 ; and see Wilder v. Winne, 6 Cow. 284 ; affi'd, 4 Wend. 100. This has been the law ever since the leading case of HoTbird v. Anderson (5 T. R. 235). Weller v. Wayland, 17 Johns. 102 ; Jackson v. Brown- ell, 3 Cai. 222. § 173. Preferences in general assignments.— Creditors ac- quire no legal rights in the debtor's property merely from the fact of his insolvency, and the debtor therefore, after as well as 13 194 GENERAL ASSIGNMENTS. [CH. XI. before he becomes insolvent, may make any disposition of his property which does not interfere with the existing rights of others. Mayer v. Hellman, 91 U. S. 496. It is an exercise of the absolute dominion which a person has over his own property, which has established the rule at common law, that a debtor may assign his property to a trustee in payment of preferred creditors. Reed v. Molntyre, 98 U. S. 507, 510. " The true reason,' ' says Senator Tracy, in Grover v. Wakeman (11 Wend. 187, 218), " why this right of preference has been allowed to the debtor is, that whilst the property is in his hands unshackled of legal liens and incumbrances, his power over it is absolute, and as he can dispose of it hy sale to any person, so he may dispose of it by way of satisfaction to any creditor." This right is unrestrained by statute in this State, except in the special instances which will be referred to, and the cases in whicli it has been decided that a debtor in failing circumstances has a right to prefer one of liis creditors to another in the dis- tribution of his estate, are very numerous. McMenomy v. JRoosevelt, 3 Johns. Ch. 446 ; Murray v. Higgs, 15 Johns. 571 ; Wilhes V. Ferris, 5 Johns. 335 ; Machie v. Cairns, 5 Cow. .547 ; affi'g Hopk. Ch. 373 ; WiU&r v. Winne, 6 Cow. 284 ; Wintringham v. Lafoy, 7 Cow. 735 ; Ilendrioks v. Mobinson, 2 Johns. Ch. 283 ; affi'd, 17 Johns. 438 ; Ilyslop v. Clarke, 14 Johns. 458 ; Orover v. Wakeman, 11 Wend. 187 ; Webh v. Dag- gett, 2 Barb. 9 ; Brigham v. Tillinghast, 15 Id. G18 ; CNeU 7. Salmon, 25 How. Pr. 246 ; Cram v. Mitchell, 1 Sandf. Ch. 251 ; Jacobs V. Bemsen, 36 N. Y. 668 ; Casey v. Janes, 37 Id. 608 ; Grant v. Chapman, 38 Id. 293 ; Putnam v. HuhheU, 42 Id. 106 ; Jay cox v. Caldwell, 51 Id. 395 ; Dana v. Owen, 54 Id. 646 ; Bathhun v. Plainer, 18 Barb. 272 ; Stern v. Pis/ier, 32 Id. 198 ; Keteltas v. Wilson, 36 Id. 298 ; Uauselt v. Vilmar, 76 N. Y. 630 ; Matter of Bryce, 16 Daly, 37 ; s. c. svb. nam. Matter of Boyd, 35 State R. 37 ; Barnett v. Kinney, 147 TJ. S. 476. In many of the States preferential assignments are prohibited hy statute, but in none has the rule at common law, as above stated, been denied. Burrill on Assignments, 6th ed. c. X. § 174. The right to prefer not favorably regarded.— Al- though the right to prefer is. sustained by such overwhelming § 174.] PREFERENCES. 195 weight of authority, j'et the law simply tolerates assignments giving preferences, it does not favor them. Vice-Chan. Sand- ford, in Mead v. Phillips, 1 Sandf. Ch. 83 ; Rathbun v. Plai- ner, 18 Barb. 272. And it appears to be the settled doctrine of the courts of this State, not to sanction the extension of the pi'in- ciples beyond what must be considered the settled law of the land. See Wilson v. Ferguson, 10 How Pr. 175, " The principle of allowing an insolvent debtor to give, arbi- trarily, such preferences, among creditors equally worthy, as may result in the payment of the entire debt of one and the loss of the entire debt of another, has been condemned in the strongest terms, by many of the wisest statesmen and the most enlightened jurists of our country. Hence it is that most, if not all the laws which are passed for the relief of insolvent debtors, are found denying their advantages to such debtors as have, in the dispo- sition of their property, given preferences among their credit- ors." Harris, J., in Webb v. Daggett, 2 Barb. 9, 11. While admitting the right to prefer, the policy of permitting its exercise has frequently been criticised and condemned. Thus Mr. Justice Duer, in Nicholson v. Leamiit (4 Sandf. 252, 280, 282), uses the following emphatic language : " The preference, which they create in the order of payment, and which, while it probably secures the favored creditors to the full extent of their demands, leaves to those who remain only a faint hope and doubtful chance of a miserable dividend, we condemn as a positive injustice, and lament that the law has de- nied to us the power of redressing the wrong. We know that the custom of giving such preferences has extensively prevailed, and is warranted in a measure by public opinion as well as by the decisions of our courts ; but we are not the less persuaded that it is forbidden by public policy, and is inconsistent with a sound morality. . . . It is now the undoubted law of the State, and however serious may be the conviction of judges, that the allowance of the practice tends to injustice and tenjpts to fraud, the legislature alone is competent to apply the remedy. Until the existing law shall have been altered by the National or State Legislature, our jurisprudence must remain liable to the reproach that we are the only nation in the civilized world in which a merchant, knowing or contemplating his insolvency. 196 (iENEEAL ASSIGNMENTS. [CH. XI. is allowed to place his whole property beyond the reach of the body of his creditors, by devoting its avails, principally or ex- clusively, to the satisfaction of the claims of a few. In every civilized country but our own, it is not only a truth in morals, but a rule in law, that the property of an insolvent debtor be- longs to his creditors in the proportion of their debts, and that every disposition made by him, in contravention of their equal rights, is null and void." And language of a similar character, although perhaps not equally severe, may be found in many of the reports of this State. See remarks of Mr. Justice Sutherland, in Grover v. Wakeman, 11 Wend. 187, 194 ; Chancellor Kent, in Biggs v. Murray, 2 Johns. Ch. 565, 577 ; Mr. Justice Nelson, in Ctin- ninghavh v. Freeborn, 11 Wend. 210, 256 ; Mr. Justice Roose- velt, in Nichols v. McEwon, 17 N. Y. 22 ; Chancellor Wal- worth, in Hoardman v. Halliday, 10 Paige, 223. But a more favorable view of the system of preferences has sometimes been expressed. Thus Mr. Justice Porter, in Town- send V. Steams (32 N. Y. 209, 213), says : " Some diversity of opinion exists, and occasionally finds expression in the courts, as to the policy of our laws, in permitting a debtor, by his own act, to withdraw his property from the reach of ordinary process. It is true that it tends to the disadvantage of those not preferred ; but it operates beneficially to the creditors as a class, by securing the application to the payment of debts, of a large portion of the assets, which would otherwise be exhausted by the costs, incident to a race of legal diligence between the prosecuting creditors. It tends also to such delay as may be needful in the execution of the trust ; but this is common to all the creditors, and no more the subject of just complaint, than the delay unavoidably incident to the extinguishment of claims against the estate of a deceased debtor." Under the statute of 1887, limiting the right to prefer to one- third of the assets, preferential assignments are more tolerable to the extent to which the preference is restricted. In MiUs v. ParTchurst, 126 N. Y. 89, 94, it is said by Mr. Justice Gray, that " If the distribution is to be made unequally among the cred- itors, and some are preferred to others in payment, the assign- ment is not viewed by the courts with any favor, and is only § 175.] PREFEKENCE OF WAGES. 197 tolerated and nplield, when all conditions are met for the preven- tion of fraud." As to preferential assignments, the same rule of construction and enforcement apply as in other contracts. (See post, § 198.) Matter of Fay (Com. Pleas), 6 Misc. 462. § 175- Preference of wages by statute.— In 1884 the Gen- eral Assignment Act was amended by inserting the following provision in Section 29 : "In all assignments, made in pursuance of this act, the wages or salaries actually owing to the employees of the assignor or assignors at the time of the execution of the assignment, shall be preferred before any other debt ; and should the assets of the assignor or assignors not be sufficient to pay in full all the claims preferred, pursuant to this section, they shall be applied to the payment of the same pro rata to the amount of each such claim." Laws of 1884, c. 328. The question was presented in several cases as to whether a failure to comply with the provisions of the act of 1884 renders the assignment invalid. The case of RichaMson v. Thurher, 104 N. Y. 606, arose on demurrer to a complaint which alleged that the assignors were indebted at the time of the making of the assignment for wages ; that they did not prefer such wages debts, but directed that the assigned property should be applied to the payment of other debts in priority to such wages debts. It was held that this assignment, made after the passage of the act of 1884, was not invalid by reason of the failure of the assignors to comply with that statute. The court was of opinion that the legislature in- tended in the event of the making of a general assignment to create a preference in the distribution of the assigned estate in favor of wages creditors, and it was also held that such a con- struction of the act would not render it unconstitutional, for the reason that since the legislature has power to regulate the mode of making general assignments, and to permit them to be made only on express conditions, that therefore, " availing himself of the permission, he cannot be supposed also to repudiate its terms." This opinion is open to the criticism that in the case before the court there was no room for presumption as to what the assignor intended by his assignment. It was conceded by the demurrer that his intention was contrary to the requirement 198 GENERAL ASSIGNMENTS. [CH. XI. of the statute. That being the case, if a general assignment is still a voluntary conveyance by contract, it is difficult to see how the legislature can constitutionally give it an effect difiEerent from its conceded meaning. Such power of remaking private con- tracts is not believed to exist in the legislature under our consti- tutional limitations. A conclusion similar to that in Richardson v. Thurber was reached in General Term, fifth department, in Burley v. Mart- son, 47 Supm. Ct. (40 Hun), 121, the opinion being placed on somewhat different grounds ; and to the same effect are Rob- erts V. Tobias, 9 State R. 59 ; Johnston v. Kelly, 50 Supm. Ct. (43 Hun), 379. But in Smith v. Hartwell, 55 Super. Ct. (23 J. & S.) 325 ; 8. c. 14 State R. 754, since the decision of Richardson v. Thur- ber, the General Term of the Superior Court of New York have held, Sedgwick, C. J., writing the opinion, that an assignment which does not comply witii the statute is void. In that case it appears (see opinion of Ingraham, J., 14 State R. 754, note) that the plaintiff was an unpref erred wages creditor, and that some of the wages creditors had been preferred by the assignment, but not all. The decision of the Court of Appeals, in Richard- son V. Thurber, was not alluded to. The ilrst paragraph of the section was amended in 1886, so that it now reads (Laws of 1886, c. 283) : "In all distributions of assets under all assignments, made in pursuance of this act, the wages or salaries actually owing to the employees of the assignor or assignors at the time of the execution of the assignment shall be preferred before any other debt." The statute as now construed in effect works a sequestration pro tanto of the property of the debtor, who makes an assign- ment and applies so much of it as is necessary for the payment of wages for that purpose wliether he so intends or not. That this may lawfully be done within constitutional provisions, guar- anteeing " due process of law" before one's property can be taken ad invitum, is to be regarded as settled by Richardson v. Thurber, supra. A provision in a general assignment that preferences shall in every particular be made in accordance with laws of the State of New York in regulation of preferential assignments, is a valid § 175.] PKEFEKENCE OP "WAGES. 199 compliance with the statute. Chambers v. Smith, 67 Supm. Ct. (60 Hun), 248. Wiien we inquire what obligations are covered by the words " wages" and " salaries," little direct help is to be found in the reported cases.' In Spencer v. Hodgman, 64 Supm. Ct. (57 Hun), 490 ; 8. c. 33 State R. 33, the employee had received notes cov- ering the amount due him, which he had transferred, and at the time' of the assignment they belonged to other persons. Sub- sequently the employee took up the notes and claimed a prefer- ence under the assignment. It was held that he was not entitled to a preference, inasmuch as the indebtedness was not owing to him at the date of the assignment. And when an employee who stood in confidential and peculiar relations to her employer per- mitted her wages to accumulate for many years without drawing any part of them, it was held that her claim was for a loan of money and not for wages. Clark, v. Andrews, 46 State R. 399. In Matter of Heath, 53 Supm. Ct. (46 Hun), 114, it was held that a claim for wages, which arose before the enactment of the statute, was entitled to a preference, and that the right of pref- erence was not affected by the circumstances that the claimant had ceased to be in the employ of the assignor at the time of the assignment. In that case the wages had accumulated for a number of years, the employee taking the notes of the assignor, which were renewed from time to time. It was held that in the absence of an express finding that the employee intended to con- vert his claim into one for money loaned, the original indebted- ness would be presumed to continue. ' The Stock Corporation Law, following the previous statute (Laws of 1893, c. 688, § 54, Laws of 1848, c. 40, § 18), renders stookholders " liable for all debts due and owing to any of its laborers, servants or employees other than contractors, for services performed by them for such corporation." In commenting on this provision in Wahefldd v. Fargo, 90 N. T. 313, 317, Dan- f orth, J. , said : " It is plain we think, that the services referred to are menial or manual services — that he who performs them must be of a class whose membera usually look to the reward of a day's labor, or service, for immediate or present support, from whom the company does not expect credit, and to whom its future ability to pay is of no consequence ; one who is responsible for no inde- pendent action, but who does a day's work, or astated job under the direction of a superior." That was the case of a book-keeper and general manager. See Coffin v. Beynolds, 37 N. Y. 640 ; Mrimon v. Brown, 38 Barb. 390 ; Bout- well V. Towmend, 87 Barb. 305 ; Aikin v. Wasson, 34 N. Y. 483 ; Balch v. 200 GENERAL ASSIGNMENTS. [CH. XI. Where an employee is entitled to a fixed sum per year as salary, and also to additional compensation equal to a certain percentage of the profits, and the employers make a general assignment during the year, the employee may prove the amount of salary due at the date of the assignment and also the per- centage of the profits earned up to that date, and such claim is entitled to a preference under the statute. Matter of Sawyet; 31 Abb. N. C. 342. § 176. Preferences limited to one-third cf the assets— the statute. — In 1887 the General Assignment Act was amended by the insertion of the following provision in Section 30 : "In all general assignments of the estates of debtors for the benefit of creditors hereafter made, any preference created therein (other than for the wages or salaries of employees under chapter three hundred and twenty-eight of the laws of eighteen hundred and eighty-four, and chapter two hundred and eighty-three of the laws of eighteen hundred and eighty-six) shall not be valid except to the amount of one-third in value of the assigned estate left after deducting such wages or salaries, and the costs and ex- penses of executing such trust ; and should said one-third of the assets of the assignor or assignors be insuSicient to pay in full N. Y. & 0. M. B. B. Co. 46 Id. 521 ; Hill v. Spencer, 61 N. Y. 274 ; Kincaid v: Dwinelle, 59 Id. 548 ; Short v. Medberry, 36 Supm. Ot. (29 Hun), 39. Under the Mechanics' Lien Latfs a wider meaninj; is given to the word " laborers." Stryher v. Cassidy, 76 N. Y. 50. By the Laws of 1885, c. 376, § 1, it is provided that " wliere a receiver of a corporation created or organized under the laws of this State and doing busi- ness therein, other than insurance and moneyed corporations, shall be ap- pointed, the wages of the employees, operatives and laborers tliereof shall be preferred to every other debt or claim against such corporation, and shall be paid' by the receiver from the moneys of such corporation which shall first come to his hands." (1 Birdseye's St., p. 677, § 27.) In People v. Bemington, 52 Supm. Ct. (45 Hun), 329 ; affi'd, 109 N. Y. 681, it was held that the superintendent and attorney of a corporation were not employees within the meaning of the statute. A review of the cases will be found in the opinion. It was also held that the statute did not apply to claims which arose before its enactment, and that preference thereunder does not pass by assignment of the claim prior to the appointment of the receiver. See Krauser v. BuckM, 24 Supm. Ct. (17 Hun), 463. See note on legal inter- pretation of the words " wages" and " salaries" in 25 Abb. N. C. 876. §177.] PREFERENCES BY SPECIAL INSTRUMENTS. 201 the preferred claims to which, under the provisions of this sec- tion, the same are applicable, the said assets shall be applied to the payment of the same pro rata, to the amount of each said preferred claims." Laws of 1887, c. 503. § 177. The limitation on the right to prefer arises only where a general assignment has been made. — The case of White V. Cotzhausen, 129 TJ. S. 329, often cited in this connec- tion, arose under the Illinois statute, which provides that " Every provision in any assignment hereafter made in this State provid- ing for the payment of one debt or liability in preference to another shall be void, and all debts and liabilities within the provisions of the assignment shall be paid pro rata from the assets thereof." The insolvent debtor in that case, with the intent of giving preferences, executed contemporaneously con- veyances, a bill of sale, a confession of judgment, and other transfers directly to creditors. He made no general assign- ment. It was held that the instruments by which the prefer- ences were created operated as a general assignment, and that the property should be distributed p?yj rata among the creditors. This case was based largely upon the decision in Preston v. Spaulding, 120 111. 208 ; but in that case there was a general assignment by deed. The Supreme Court of Illinois has not accepted the views of the Supreme Court of the Dnited States, as being in accordance with their decisions. Farwell v. Nilsson, 133 111. 45 ; Young v. Clapp, 147 111. 176 ; Sohroeder v. Walsh, 120 111. 403, 412 ; Weber v. Mich, 131 111. 520, 533 ; First Nat. Bank v. North Wis. Lumber Co. 41 III. App. 383 ; Am. Cutlery Co. V. Joseph, 44 III. App. 194. In Young v. Clapp, supra, citing the language of the statute, as above quoted, the court says (p. 184) : " The assignment act does not prohibit preferences generally, but only preferences which are contained in written deeds of assignment voluntarily executed for the benefit of cred- itors." In Hardt v. Heidweyer, 152 U. S. 547, the Supreme Court declined to determine whether it was bound by the con- struction of the statute placed upon it by the Illinois Court (see Union Bh. of Chicago v. Kansas City Bank, 136 U. S. 223, 235), or >vhether there was any substantial difference on the views of the two courts. White v. Cotzhausen is not now to 202 GENERAL ASSIGNMENTS. [cH. XI. be regarded as a controlling authority. Moore v. Meyer ^ 47 Fed. R. 99. In this State the doctrine of White v. Cotzhausen at one time seemed to be regarded as applicable to our statute. (See the comments on this case in Berger v. Varrelmann, 127 N. Y. 281, 290.) Thus in Tompkins v. Hunter, 72 Supm. Ct. (65 Hun), 441 ; rev'g Tompkins v. First Wat. Bank, 18 N. Y. Supp. 234, where a firm, being largely indebted to a bank and also to other creditors, transferred all its property to the bank in satisfaction of the indebtedness due to it, with the agreement that the firm would not make a general assignment, it was held, at the suit of a judg- ment creditor, that the transfer was fraudulent and void, as having been made with the intent of evading the operation of the assign- ment act. Upon a re-trial of this case (24 N. Y. Supp. 8) there was no evidence furnished of an agreement on the part of the debtors not to execute a general assignment, and the only question considered was whether a transfer of all the debtor's prjperty directly to a creditor, with the intent to give a preference, was within the operation of this assignment act. After a careful con- sideration of the doctrine of White v. Cotzhausen, and the argu- ment based upon it at General Term, Judge Bradley, at Special Term, held that, there having been no attempt on the part of the debtor to make what is distinctively known as a general assign- ment, the preferential transfer which he made was not subject to limitations and restrictions of the assignment act. In Stein v. Levy, 62 Supm. Ct. (55 Hun), 381, where judgment was entered against the debtor upon an offer of judgment, and under execu- tion upon the judgment the debtor's whole stock of goods was seized, it was held, there being no general assignment, that this did not create an illegal preference under the assignment act, in- asmuch as that act relates exclusively to general assignments. To the same effect are Woodworth v. Hodgson, 35 State E. 964 ; affi'd, 129 N. Y. 669 ; Granger v. Lyman, 39 State R. 288 ; Trier v. Herman, 115 N. Y. 163 ; First Nat. Bank v. Bard, 32 State R. 1010 ; Boessneck v. Cohn, 26 State R. 969 ; Mac- donald v. Wallstein, 26 State R. 975 ; Manning v. Beck, 129 N. Y. 1 ; Central Nat. Bank v. Seligman, 138 N. Y. 435, 441 ; Abegg v. Bishop, 142 N". Y. 286 ; Maas v. Falk, 54 State R. 160. §§178,179.] CONTEMPORANEOUS PBEFEEENCES. 203 The assignment act is not compulsory. The law does not re- quire of a failing or insolvent debtor that he shall place his prop- erty in trust for his creditors. He may remain inactive while creditors exhaust his property by legal proceedings, or he may himself distribute it among his honest creditors in any manner he sees fit, except that if he resorts to a general assignment, he must then comply with the requirements of the act, and cannot by means of such assignment give preferences in excess of the amount permitted by the statute. So long as he does not make a general assignment, none of the provisions of the assignment act will effect his conduct. § 178. Excessive preferences in the assignment do not in- validate it. — An excess of preference in the assignment under this statute does not aifect the validity of the assignment. The statute only requires that the preferences shall be reduced j)ro rata until they do not exceed one-third of the assigned estate. Cent. Nat. Bamk v. Seligman, 138 N. Y. 435 ; Stein v. Levy, 62 Supm. Ot. (55 Hun), 381 ; Cutter v. Hume, 43 State E. 242 ; Hose v. JSenton, 37 State R. 683. The statute operates upon the preference only and not upon the assignment. It does not undertake to destroy or affect the assignment, except in so far as it provides for preferences beyond the prescribed limit. When the preferences made exceed this limit, the statute inter- venes and declares the consequences. It reduces the preference to the limit mentioned in the statute. Cent. Nat. Bank v. Seligman, 138 N. Y. 435.0^-^ s^x'y^^'^ ■ § 179. Preferences contemporaneous with, but not made in the deed of assignment. — When preferences are given liy debtors in contemplation of the execution of a general assign- ment, but by independent instrumentalities intended to evade the limitations of the assignment act, perplexing questions have arisen. Some of these questions have already received definite answer in the court of last resort. 1. It may now be regarded as settled that preferences by special transfers or confessions of judgment, though given in contemplation of the execution of a general assignment, and with the intent of evading the limitations of the statute, if they are 204 GENERAL ASSIGNMENTS. [CH. XI. otherwise untainted bj fraud, do not render the assignment exe- cuted as part of the intended scheme of preference illegal or invalid. Cent. Nat. Bank v. Seligw.an, 138 N. Y. 435 ; Lon- don V. Martin., 86 Supm. Ct. (79 Hun), 229 ; Ahegg v. Bishop, 142 N. Y. 286. These cases reverse the former rulings in the lower courts in Abegg v. Schwal, 23 Abb. N. C. Y ; Mrst Nat. Banh v. Bard, 66 Supm. Ct. (59 Hun), 529 ; Ahegg v. Bishop, 73 Supm. Ct. (66 Hun), 8 ; s. c. 49 State R. 191. These decisions rest upon the ground above stated (§ 178), that the assignment act (amendment of 1887) was intended not to defeat the assignment, but to limit the right of preference, and that the effect of the statute is to cut down an excessive preference^ and not to strike down the assignment. Hence, assuming that the preferences given in contemplation of the assignment are within the operation of the statute, and are ex- cessive, yet if the transaction is otherwise free from fraud the effect is not to render the assignment invalid. In London v. Martin, 86 Supm. Ct. (79 Hnn), 229, 233, Mr. Justice Parker says, referring to Cent. Nat. Baiik v. Seligman, supra, and Ahegg v. Bishop, supra: " A failing debtor may now practically prefer his creditors to as great an extent as his property permits, provided he does it by giving mortgages and bills of sale, or con- fessing judgments, instead of putting it in the general assignment, which it is said the statute (Laws of 1887, c. 503) alone con- demns." But this remark requires qualification when the mort- gages, bills of sale, or confessed judgments are so connected with it as to constitute a part of it. 2. Preferences given by special methods other than the general assignment, if, in fact, a part of the scheme of assignment, will be regarded as coming within the operation of the general assign- ment act. Berger v. Varrelmann, 127 N. Y. 281 ; Spelmam, v. Freedman, 130 jST. Y. 421 ; Cent. Nat. Bank v. Seligman, 138 N. Y. 435. " The words of the section must be construed to embrace all of bhe instrumentalities which failing debtors, in contemplation of a general assignment, volnntarily employ to give preferences to particular creditors," FoUett, C. J. Berger v. Varrelmann, 127 N. Y. 281, 289 ; Biessner v. Cohn, 22 Abb. N. C. 312. The word " afisignment" is thus construed to embrace not merely § 180.J KNOWLEDGE BY CREDITOE. 205 the written instrument, but the entire act of transfer. Richard- son V. Thurher, 104 N. Y. 606, 611. Accordingly, when the debtor has attempted to make preferences by instrumentalities other than the assignment, the assignee, or, if he refuses to act, the creditors in aid of the assignment, may maintain actions to recover the property so disposed of, to the end that it may be administered under the assignment. Wilcox v. Payne, 19 State R. 893 ; s. c. 22 Abb. JST. C. 307 ; Riessner t. Cohn, 22 Abb. N. C. 312 ; Spelnuinx. Jaffray, Id. 315 ; Sweetser v. Smith, Id. 318 ; s. c. 20 State R. 62 ; Spelman v. Freedman, 130 N. T. 421 ; Thalheimer v. ElajpeWky, 36 State E. 116 ; s. c. 12 N. Y. Supp. 941. This is the only remedy in case of excessive preferences when the transaction is not otherwise fraudulent. Abegg v. Bishop, 142 N. Y. 286, 289. When excessive preferences are made in contem- plation of an assignment, and thus come within the operation of the rule above stated, the application of the rule calls for the determination of two other questions. The first of these is whether, in an action brought by an assignee or by a creditor, in aid of the assignment to reach property in the hands of pre- ferred creditors, it must be shown that the preferred creditor received the preference with knowledge of the contemplated^ assignment. The second is whether preferences not given in the assignment, but in contemplation of it, are void in whole or merely to the excess above the statutory limit. § i8o. Is it necessary to show knowledge by the creditor preferred before the assignment of the contemplated as- signment ? — The cases which are of leading importance upon this inquiry are Manning v. Beck, 129 N. Y. 1 ; Berger v. Varrelmamn, 127 N. Y. 281 ; and Spelman v. Freedman, 130 N. Y. 421. In Manning v. Beck, supra, a father who was indebted to his son gave him a bill of sale of his stock of goods in satisfaction of the debt, and on the following day made a general assignment. It was found that the son had no knowl- edge when he received the bill of sale that his father contem- plated making the assignment. The action was brought by a judgment creditor to set aside both the bill of sale and the as- signment as fraudulent. The only fraud attempted to be shown 206 GENERAL ASSIGNMENTS. [CH. XI. was " a fraud on the law," in attempting to evade tlie provisions of the assignment act in giving an excessive preference. A judgment setting aside the assignment and bill of sale for fraud was reversed. It will be observed that this was not an action to subordinate the special, preference to the operation of the assign- ment act, but it was an attack upon both the assignment and the bill of sale. There are expressions in the opinion in that case to the effect that excessive preferences, though made as parts of the scheme of assignment, would not be affected by the assignment act, un- less the preferred creditor had knowledge that the debtor in- tended to make an assignment, and that the security was given with the intent that it should result in consequence of the assign- ment in a violation of the provisions of the act. These remarks appear to have been obiter. In order to reach the preference in that case, a knowledge of or participation in the assignor's fraud on the part of the preferred creditor was necessary, for the reason that the preferred creditor was a purchaser for value, and the action was one attacking the conveyance to him as well as tlie voluntary assignment to the assignee as having been made with a fraudulent intent. In Berger v. Varrelmann, 127 N. Y. 281, an action brought by general creditors in aid of the assignment, to set aside a pref- erence given by a judgment confessed in contemplation of the assignment,. the Second Division of the Court of Appeals by a divided court (Bradley, Haight, and Brown dissenting) affirmed a judgment setting aside the confessed judgment and directing the preferred creditor to pay to the assignee the amount received by him thereunder. In support of the judgment, the court in- ferred from the evidence, although there was no finding to that effect, that the creditor knew of the contemplated assignment. In the prevailing opinion, Haight, J., refers to the rule that an excessive preference in the assignment, thougli known to the preferred creditor, does not defeat the assignment ; and he says it is not easy to see why want of knowledge that an assignment is contemplated would avail attacking creditors, though the pref- erence be given bv an independent instrument ; the statute operating upon both with like effect. Spelman v. Freedmcm, 130 N. Y. 421 ; affi'g 61 Supm. Ct. (54 Hun), 409 ; affi'g §181.] PEEFJJRENOE IN CONTEMPLATION OF ASSIGNMENT. 207 22 Abb. N. C. 315, was an action in aid of the assignment to set aside judgments confessed in contemplation of the assign- ment. The complaint which was demurred to was deemed to contain sufficient allegations that the judgment debtor had knowl- edge of the contemplated assignment. The necessity for such averments was assumed rather than determined. Considering the question apart from authority, it is to be ob- served that the theory upon which preferences otherwise valid are affected by the execution of an assignment, is that they are regarded as parts of one transaction together constituting a gen- eral assignment. The whole transaction regarded as a general assignment is, therefore, subject to the provisions of the General Assignment Act. It follows, therefore, that the excessive prefer- ence, whether found within or without the written assignment, if a part of the assignment, and if not otherwise illegal, is by the operation of the assignment act cut down to the amount per- mitted by law, and is not wholly invalid. The statute limits and controls the operation of the preference with precisely the same effect as though the assignment had been made by one instead of by several instruments. Olapp v. Clark, 49 Fed. Eep. 12B. This is the reason, and the only reason, which justilies any inter- ference with a preference of a valid debt. There is no question of fraudulent intent in preferring such a debt, and the assign- ment act does not limit the preference by rendering it fraudulent or illegal {Cent. Nat. Bank v. Seligman, 138 N. Y. 435, 443), but operates upon it by rendering the excess beyond a certain amount void, wholly irrespective of the intent of the assignor or of the knowledge of the preferred creditor. When the assignment is fraudulent by reason of a fraudulent intent, as at common law, creditors are not bound by it. They may disregard it, and proceed to enforce their right against the assigned property by remedies which the law affords. Whether creditors can then reach property which has been preferentially conveyed in payment of honafide debts, as a part of the fraud- ulent assignment, must, it seems, depend upon whether the preferred creditors can be charged with guilty knowledge of the fraud in the assignment. Clapj) v. Cla^'k, 49 Fed. R. 123. See :post, Chap. XIV, § i8i. Are preferences given in contemplation of the as- 208 GENERAL ASSIGNMENTS. [CH. XI. signment void in whole, or as to the excess ?— In Berger v. Varrelmann, 127 N. Y. 281, the action was brought by a cred- itor in aid of the assignment to recover moneys obtained by a preferred creditor upon judgments confessed in contemplation of the assignment, and witli tlie intent to evade the instructions of the statute. A divided court (second division) affirmed a judg- ment for a recovery of the moneys obtained by the preferred creditor. In the dissenting opinion the position was taken that if the preference was a part of the scheme of assignment, the creditor should not be denied entirely the benefit of the pref- erence, but he should at least be treated as a preferred creditor, and should share in the amount permitted by the statute to be distributed among preferred creditors. Spelman v. Freedman, 130 N. Y. 421 ; afR'g 61 Supm. Ct. (54 Hun), 409 ; affi'g 22 Abb. N. C. 315, was an action in aid of the assignment to set aside judgments confessed in contem- plation of the general assignment. The complaint, which was demurred to, was deemed to contain sufficient allegations that the judgment creditors had knowledge of the contemplated as- signment. The relief demanded was that the confessed judgment be set aside, and that the judgment creditors pay to the assignee the amount received by them to be administered under the as- signment. The judgment creditors were preferred creditors under the assignment, so that they were entitled in any event to a priority to the extent of one-third of the assets. In the lower courts cases are numerous in which the prefer- ence has been declaimed wholly void without proof of the knowl- edge of the preferred creditor. First Nat. Bh. v. Bard., 66 Supm. Ct. (59 Hun), 529 ; s. c. (on previous appeal), 32 State R. 1010 ; Abegg v. Schwab, 23 Abb. N. C. 7 (affi'd, on the ground of fraud in the assignment, 31 State R. 139) ; Kes- sell v. Drucker, 23 Abb. N". C. 1. See White v. Benjamin (Supr. Ct.), 3 Misc. 490 : Sweetser v. Smith, 22 Abb. N. C. 319 ; Wilcox V. Payne, 22 Abb. N. C. 307. See Eiessner v. Cohn, 22 Abb. N. C. 312 ; Otis v. Bertholf, 37 State R. 172. But in none of these cases was the question raised. In Manning v. Bech, 129 N. Y. 1 ; rev'g 61 Supm. Ct. (54 Hun), 102, Judge Peckham, in the opinion of the court, directs attention to the q^uestion of knowledge on the part of the § 182.J DISTRIBTTTION UNDER THE STATUTE. 209 preferred creditor in JBerger v. Ya/rrelmann, supra, intimating that if such knowledge had not been inferred, the preference would not have been set aside, but would have been allowed to stand as a valid preference to the extent of one-third of the estate of the assignees. It is important here, as in the preceding discussion, to con- sider the method by which the General Assignment Act operates upon excessive preferences. It does not declare them to be fraudulent, nor does it avoid them in whole, but only in part. Whenever a preference is brought within the operation of the act, the effect is not to destroy it, but to limit and control it. It would seem to follow as an inevitable consequence, that in actions brought to recover property conveyed to preferred creditors in violation of the statute, or to restrict preferences, preferred cred-^ itors (the preferences being otherwise valid) would be entitled to such share of the preferences as is permitted by the act under the operation of which they are brought. § 182. Manner of distribution under the statute. — The effect of the statute of 1887 is simply to limit the amount which can be applied to the payment of preferred claims, and an as- signor still has the power to designate the manner in which that amount shall be applied. Matter of Tuller, 22 State R. 242 ; Matter of Boyd, 35 State R. 37 ; s. c. sub. nom. Matter of Bryoe, 16 Daly, 443. The debtor may still direct the ap- plication of one third of the net assets toward the payment- of the claim of one preferred creditor, before such assets shall be applicable to the payment of the claim of a second or third preferred creditor. Mattel- of Bryce, 16 Daly, 443. He may also provide for the payment of the preferred debts in classes, in such a manner that if one-third of the assets shall be insufficient to pay all the preferred classes, those lirst preferred shall be paid in priority. Matter of Sisson, 66 Supm. Ct. (59 Hun), 330 ; Matter of Eaton, Id. 85. It has also been held that when the direction of the assignment was to pay certain preferred debts in the order named with interest, that the assignee is justified in paying the debts in their order with interest, although by so doing the fund- applicable to preferred debts is exhausted before all the preferred creditors are paid. Matter of Fay, 6 Misc. 462. 14 210 GENERAL ASSIGNMENTS. [CH. XI. § 183. Preferences by corporations. — The statutes cited wlieii we were considering tlie autliority of different classes of corporations to make assignments for the benefit of creditors {ante, §§ 119, 122, 123), as we have seen, in effect prohibit insolvent domestic corporations of every description from making prefer- ential assignments. It remains to consider in this connection the character of the acts which will be regarded as coming within the inhibition of the statutes. The language of the Stock Corporation Law of 1892 (Laws of 1892, vol. II, p. 1838, § 48) prohibits any corporation which shall have refuvsed to pay any of its notes or obligations when due, in lawful money of the United States, or any of its officers or directors or stockholders from transferring any of its property to any of its officers, directors, or stock lioldera, directly or indi- rectly, for the payment of any debt or upon any other consid- eration than the full value of the property paid in cash. " No conveyance, assignment or transfer of any property of any such corporation by it or by any officer, director or stockholder there- of, nor any payment made, judgment suffered, lien created or security given by it or by any officer, director or stockholder when the corporation is insolvent or its insoVoency is imminent, with the intent of giving a preference to any particular creditor over other ci-editors of the corporation shall be void." The phrase "insolvent, or its insolvency is imminent," is new. The words of the previous statute were " in contempla- tion of its insolvency" (see ante, % 119). Under the former statute it was held that a payment in the usual coui'se of busi- ness, although by an insolvent corporation, was not prohibited. Dutcher v. Importers^ c& Traders'* Nat. Bank, 59 N. Y. 5. The act to be prohibited must have been done because of existing or contemplated insolvency. Paulding v. Chrome Steel Co. 91: N. Y. 334 ; Casserly v. Manners, 16 Supm. Ct. (9 Hun), 695. Under the previous statute the transferee of property from an insolvent corporation, when the transfer was not for a valuable consideration or in the usual course of business, was not -pro- tected by reason of his ignorance of the company's insolvency, or of the fact that the transfer was preferential. Atkinson v. Rochester Printing Co. 114 N. Y. 168. § 184.J ±>EEFERENCES BY COKPOEATIOlSrS. 211 It appears that under the language of the present statute the transfer, if made when the corporation is insolvent, or when its insolvency is imminent, would not be protected because it was made in the usual course of business, and clearly the knowledge by the transferee of the financial condition of the company or of the intent to prefer is immaterial. And under the Revised Statutes a transfer to an officer of the corporation, when it was, in fact, insolvent, was invalid without regard to the intention to prefer, while a different rule applied in the case of transfers to persons who were not officers or stock- holders. In Milhanh v. Welch, 81 Supm. Ct. (74 Hun), 497, the cor- poration, in 1891, being in need of money, made a loan from several of its directors, which the company secured by an assign- ment of accounts, with an agreement that other accounts might be substituted in place of the accounts so assigned. An assign- ment of claim was made September 1, 1893, after the company had failed to meet its obligations at maturity. Three of the persons to whom the last assignment was made resigned as directors before the assignment. It was held that, as to these three persons, the burden of proof was on the plaintiff, the re- ceiver who assailed the transfer, to show that it was made with the intent to give a preference, but that as to the persons who were then directors the transfer was absolutely invalid, as having been made after this company had refused to pay its obligations. § 184. Preferences by corporations^'udgments suffered. — The Revised Statutes prohibited " any transfer or assignment in contemplation of the insolvency of such company." In Kingdey v. First Nat. Bank, 38 Supm. Ct. (31 Hun), 329, it was held that when the company, being insolvent, offered to allow judgment to be taken against it and such judgments were entered, it in effect transferred and assigned its property in contemplation of insolvency, and the judgments so entered might be avoided at the suit if a receiver subsequently be appointed. The' Stock Corporation Law of 1892 {supra, % 119) contains the words as quoted above, " nor any payment va-adLe, judgment suffered, lien created, or security given." In Varnum v. Hart, 119 N". Y. 101, it was held that the ob- 212 GENEKAL ASSIGNMENTS. [CH. XI. ject of the section of the Revised Statutes was to prevent pref- erences by putting a restraint upon the action of the corporation and its officers. It is there said by Earl, J. (p. 105) : " The statute places no restraint whatever upon the creditors, and they are permitted to pursue their remedies in all the ways al- lowed by the law, and to procure satisfaction of their claims if they can. Furthermore, the statute contemplates no affirmative action on the part of the corporation, and it cannot be violated by mere silence or omission to act on its part or the part of its officers. An insolvent corporation is not obliged to defend any suit brought against it for the sole purpose of defeating a prefer- ence, and it may in such case suffer default and thus allow a judgment to be obtained against it, knowing that the creditor designs to obtain, and will thus obtain, a preference. Such con- duct on its part does not constitute a transfer or assignment of its property, and there is nothing in the statute which condemns judgments thus obtained." See Dickson v. Mayer, 26 Abb. N. 0. 257. In Throop v. Hatch Lithographic Co. 125 N. Y. 530, decided under the provisions of the Revised Statutes, it was held that the statute prohibited the acquisition by a director of an insol- vent corporation who is also a creditor, through the process of attachment of a preferential lien on the corporate assets ; and this, although the writ was issued in hostility to, and not in collu- sion with the corporation. See Dickson v. Mayer, 35 State R. 616. These decisions made a distinction between a creditor who is also a director or stockholder and other creditors, and held that while it is competent for a corporation to permit creditors to take hostile proceedings by which a preference may be obtained through vigilance, and may even suffer default in an action upon a just claim {Varmcm v. Hart, 119 N. Y. 101), yet when the creditor who is also a stockholder and director of a corporation undertakes thus to obtain a preference by an action at law, with the co-operation of his associates in the board of trustees, the case is brought directly within the condemnation of the statute, and amounts to an unlawful preference by way of assignment and transfer of property in contemplation of insolvency. Kimg v. Union Iron Co. 33 State R. 545 ; Dickson v. Mayer, 35 State R. 616. §§ 185, 186.] WHAT DEBTS MAY BE PREFERRED. 213 The disability which attaches to a director under the statute does not exist in the case of foreign corporations, to which the statute has no application. Hill v. Knickerbocker Eleo. L. & P. Co. 45 State R. 761. "When a judgment has been confessed in violation of the statute, and the property of the corporation has been sold thereunder and the proceeds paid over to the plaintiff in the confessed judgment, a subsequent judgment creditor cannot maintain an action to re- cover damages for the wrongful acts of the former parties. His remedy is in equity to recover the property for the equal benefit of creditors. Braem v. Merchants' Nat. Bank, 127 N. Y. 508. § 185. Agreement to give preference. — In Nat. Park Bank v. WJiitmriore, 47 Supra . Ct. (40 Hun), 499, it was held that an agreement made by a debtor at the time of contracting a debt, that in the event of his subsequently executing an assignment the indebtedness should be preferred, rendered invalid an assign- ment afterward made in accordance with such agreement. This view, however, was not sustained by the Court of Appeals. 104 N. Y. 297. Earl, J., writing the opinion, remarked (p. 304), " A failing debtor may make an assignment preferring one or more creditors because he is under a legal, equitable or moral obliga- tion to do so, or he may do it from mere caprice or fancy, and the law will uphold such an assignment honestly made. If he may make such an assignment without any antecedent promise, why may he not make it after and in pursuance of such a promise ? How can an act otherwise legal be invalidated because made in pursuance of a valid or invalid agreement honestly made V , In the United States courts the decisions are in hannony with the Court of Appeals. Smith v. Craft, 123 U. S. 436 ; affi'g 17 Fed. R. 705 ; rev'g 11 Biss. 340. The case of CUrk v. Andrews, 46 State R. 399, so far as it is inconsistent with Nat. Pa/rk Bank v. Whii/more, 104 N. Y. 297, must be regarded as overruled. § 186. What debts may be preferred. —The assignor may lawfully prefer any legal debts and liabilities. He may prefer his wife for money loaned by her to him [McCartney v. Welch, 214 GENERAL ASSIGNMENTS. [cH. XI. 44 Barb. 271 ; afii'd, 51 N. Y. 626), even where the loans were all made previous to the act of 1848 (Laws of 1848, c. 200). Jaycox V. Caldivell, 51 N. T. 395 ; see Woodworth v. Sweet, Ibid. 8 ; Kluender v. Lynch, 2 Abb. Dec. 538. So he may prefer her for money loaned under an agreement with him that she might keep boarders and have the profits arising therefrom {Lyon V. Davis, 32 State R. 340 ; Kittredge v. Yan Tassell, Id. 76), or for a valid indebtedness. Smith v. Perine, 121 N. Y. 376. " Dealings between husband and wife which result in the appropriation of the husband's property for the payment of a debt claimed to be due to the wife, to the exclusion of other creditors, it must be admitted furnish uncommon opportunities for the perpetration of fraud, and should be carefully and rigidly scrutinized." O'Brien, J. Manchester v. Tilhetts, 121 N". Y. 219, 222. See White v. Benjamin, 3 Misc. 490, 499. In Mchols V. Wellings, 68 Snpm. Ct. (61 Hun), 601 ; s. c. 41 State R. 881, where it appeared that the assignor had been in the babit of giving his wife a certain sum weekly for household expenses, the whole of which she did not expend, and from time to time returned to him the unexpended balance, it was held that in the absence of satisfactory evidence of gift a preference to the wife for the amount so returned would be deemed fictitious. See I'atcott V. Thomas, 50 State R. 621. In Third Nafl Bank v. Guenther, 123 N. Y. 568 ; rev'g 17 State R. 403, it was held that where a married woman, having a separate estate, employed her husband to manage her business upon an agreement to pay him a fixed salary, and also to support the family, the preference in assignment of a claim for the salary agreed to be paid to the husband, did not render the assignment invalid. A similar view of the same assignment was taken in Romer v. Koch, 56 Siipm. Ct. (49 Hun), 483. See also Stanley y. Nat. Union Bk., 115 IST. Y. 122.- As to the nature of the obligation between husband and wife, which will support a preference to the wife, the court, after re- viewing the authorities in L/yon v. Zdmmer, 30 Fed. R. 401, 409, says : " If a husband, not acting in a fiduciary character as to the wife's income, of which she personally has entire control, collects such income habitually with her consent and acquiescence, and mixes those collections with his own moneys, and does not, at § 186.] WHAT DEBTS MAY BE PREFERRED. 215 or before the time of collecting them, give proof, by his own dec- larations or acts, that he receives them as hers, for her separate use, and holds them as a debt due from himself to her, and she permits this appropriation of her income to go on tor a protracted period, then, and in such a condition of affairs, she cannot after- wards, on the occurrence of a family quarrel, of insolvency, or other event, recall a permission so long indulged, and require him or his assignees to make her a creditor of her husband for the amounts so collected." See Syracuse Chilled Plow Go. v. Wing, 85 N". Y. 421 ; affi'g 27 Supm. Ct. (20 Hun), 206 ; and see cases collected in note to Lyon v. Zimmer, supra, p. 41 1. A debtor may prefer claims not yet due. This does not tend to hinder or delay creditors, for the assignees may retain in their hands sufficient to meet such claims, and distribute the residue without delay. Read v. Worthington, 9 Bosw. 617. He may give a preference to a surety or indorser. Hendricks v. Walden, 17 Johns. 438 ; s. c. as Hendricks v. Robinson, 2 Johns. C/li. 283 ; Cunningham v. Freeborn, 11 Wend. 240 ; Keteltas v. Wilson, 36 Barb. 298 ; s. c. 23 How. Pr. 69 ; Lansing ^r. Wood- worth, 1 Sandf, Ch. 43. Bat he may not secure debts not in existence, or make provision for the payment of future ad- vances {Hendricks v. Robinson, supra; Barnum v. Hemp- stead, 7 Paige, 568), or future indorsements {Lansing v. Wood- worth, 1 Sandf. Ch. 43), or for future services {Stafford v. Merrill, 69 Supm. Ct. [62 Hun], 144). And he may give a preference to a person holding claims which he has purchased at a large discount. Low v. Graydon, 50 Barb. 414 ; Powers v. Graydon, 10 Bosw. 630. He may prefer obligation for trust funds. Cohen v. Moorhouse, 21 State K. 436. But a preference of a fictitious debt or of a creditor for an amount as excessive of that to which he may be justly entitled, will render the whole assignment invalid. See Chap. XIV". If there is an attachment upon property which has not yet been decided by the court, an assignment preferring this attach- ment debt will not be void. The fact that the preference is conditional or contingent makes no difiEerence, if unnecessary delay is not thereby caused. Grant v. Chapman, 38 E". T. 293. Debts which have been previously secured may be preferred. 216 GENERAL ASSIGNMENTS. [CH. XI. but the secured creditors will be held bound in equity to resort to their previous security first, so as to give the other creditors provided for, the benefit of the assigned fund. Dimon v. Del- monico, 35 Barb. 554 ; Besley v. Lawrence, 11 Paige, 581. See Sinith v. Ferine, 121 IST. Y. 376. § 187. There must be an absolute surrender of the prop- , erty without conditions.^ — It has been frequently declared that assignments giving preferences must devote the assigned prop- erty to the satisfaction of the debts, without condition or quali- fication ; and that the debtor shall reserve nothing to himself until all the creditors are paid. Such assignments cannot be made the instrument of placing the assigned property beyond the reach of creditors, for the benefit, either immediate or re- mote, of the insolvent himself. Grover v. Walaeman, 11 Wend. ,187 ; Haydock v. Ooope, 53 N. Y. 68 ; Ooodrich v. Downs, 6 Plill, 438 ; Mchols v. McEwen, 17 N. Y. 22 ; McClelland v. Bemsen, 14 Abb. Pr. 331 ; Raihbun v. Plainer, 18 Barb. 272. But this principle, although announced in cases in which prefer- ential assignments have been made, is not exclusively applicable to such cases. And an assignment made for the equal benefit of all creditors is subject to the same rule. The cases illustrative of the principle here referred to will be found more fully collected in another connection. See Chap. XII r. § 188. Preferences must be declared. — As we liave already had occasion to remark, the assignment must itself fix and de- termine the rights of the creditors in the assigned property. The assignor cannot reserve to himself the right to determine the preferences to be given. To permit' this would be to place the creditors in the power of the debtor, and compel them to ac- quiesce in such terms as the debtor may think proper to prescribe as the only condition upon which they are permitted to partici- pate in his property. This would be a fraud upon the creditors, and necessarily delay and hinder them in the collection of their debts. Averill v. Louchs, 6 Barb. 470, 476 ; Orover v. Wake- Tnan, 11 "Wend. 187, 203 ; s. c. sub. norm. WaTceman v. Grover, 4 Paige, 23, 41 ; Barnum v. Hempstead,, 1 Paige, 568, 571 ; § 188.J PREFEEENCE MUST BE DECLAKED. 217 Boardman v. Halliday, 10 Id. 223, 227 ; Sheldon v. Dodge, 4 Denio, 21Y ; Hyslop v. Clarice, 14 Johns. 458, 462 ; Kercheis v. Schloss, 49 How. Pr. 284 ; Brown v. Outhrie, 46 Supra. Ct. (39 Hun), 29, 83. Where the assignee was authorized, after paying certain speci- fied creditors, to apply the residue of the proceeds of the prop- erty to pay all the other debts of the assignor in such order of priority as the assignee should deem proper, and if the residue of the fund was not sufficient to pay all such debts in full, the assignees were to apply it to the payment of such and such parts of those debts as they should judge most just and equitable ; this provision was held to render the assignment void. Bowrd- man v. Halliday, 10 Paige, 223 ; Barnum v. Hempstead, 7 Paige, 568. The fact that the assigned property was not suffi- cient to pay the creditors whom the assignor had himself pre- ferred was not deemed significant. The intent of the assignor at the time of making the assignment must control. Board- man V. Halliday, supra. Thus when an assignment provided that the payment should be made to a creditor after an accounting had been had between him and the assignor, and the exact amount due the creditor has been agreed upon by the assignor, it was held that since the amounts and time of payment were thus within the control of the assignor, the agreement was void. Keiley v. Dusenbury, 19 Alb. L. J. 498. And when the preferred creditors were described as a class and not by name, this was not regarded as rendering the assignment fraudulent, as delegating to the assignee the power to designate future preferences. Maach v. Maaoh, 56 Supm. Ct. (49 Hun), 507. So in the case of Frazier v. Truax, 34 Supm. Ct. (27 Hun), 587, where preferences were given to certain persons who were not creditors, and it was attempted to be shown by parol that the preferences were made really for the benefit of certain other persons who were actual creditors, it was held that the assign- ment was void as matter of law. Cullen, J., in delivering the opinion of the court, said : " If this mode be tolerated it will make most glaring frauds easy of accomplishment. It is settled law that a power reserved to either the assignor or assignee to desig- 218 GENERAL ASSIGNMENTS. [CH. XI. nate future preferences renders the assignment void. {Sheldon v. Bodge, 4 Den. 217.) To be valid the instrument must definitely settle the respective rights of the creditors." But a mistake in the name of a creditor ( Webh v. Thomas, 49 State E. 462), or a mere indefiniteness or incorrectness in the description of the debt (Bernheimer v. JiindsJcopf, 116 N. T. 428 : Roberts v. Vietor, 130 N. T. 585), will not invalidate an assignment. An application of the rule stated above will be found in the case of a preference upon a secret trust for the benefit of the assignor. Thns, where the assignor, acting in concert with his son, one of the assignees, but without the knowledge of the other assignees, simultaneously, with the making of the assign- ment, procured from certain of the creditor to whom a prefer- ence was given under the assignment, agreements in writing to lend to his son, one of the assignees, a large portion of the money that they should receive upon their debts under the assignment, for the term of five years ; such loan to be secured by the notes of the son, indorsed by the assignor, and authorizing the as- signees to pay to this son the sums so agreed to be loaned, and take his receipt therefor ; and the name of the son was used for the benefit of the assignor, and the agreement was in fact made between the creditors and the assignor, to enable the latter to prosecute business in the name of the son, for his own benefit, and to use the money in such business ; the assignment was deemed fraudulent and void. Haydock v. Coope, 53 N. Y. 68, 76. Mr. Justice Grover, in pronouncing the opinion in that case, made use of the following language : " To hold that a debtor may ex- ercise his right of giving preferences among his creditors so as to secure to himself the future control of the property assigned or its proceeds, would give facilities for the grossest frauds and utter- ly defeat the ends for which assignments have been sustained, which are the application of the property of insolvents to the pay- ment of their debts. It would enable insolvent debtors to coerce creditors into almost any agreement which they desired. Under such a rule such a debtor could not only compel a release of the whole upon preferring a part of the debt, but could, as in the present case, compel the creditors to leave the property in his hands, subject to his control, upon such terms as he should die- § 189.J OTHER LIMITATIONS ON THE EIGHT TO PREFER. 219 tate." Further illustrations of the rule here stated will be found post. Chap. XIII. § 189. Other limitations on the right to prefer. — The right to give preferences in cases of insolvency has been ex- pressly denied to corporations. See ante, § 183. And also to limited partnerships. 1 R. S. 1QQ, §§ 20, 21 ; 3 E. S. Yth ed. 2238, cited at length, ante, § 121 ; and see the cases there re- ferred to. In addition to these express restrictions, the giving of a pref- erence is a bar to a discharge under the two-thirds act. See ante, §34. A debtor who had been proceeded against under the act known as the Stilwell act (Laws of 1831, p. 400), could execute a gen- eral assignment so as to defeat the priority obtained by the debtor who instituted those proceedings. Spear v. Wardell, 1 N. Y. 144 ; Hall v. Kellogg, 12 N. Y. 325 ; Wood v. Bola/rd, 8 Paige, 556, 557. But this act has now been repealed. CHAPTER XII. APPROPRIATION OF PROPERTY IN ASSIGNMENTS BY FIRMS AND THEIR MEMBERS. § 190. When firm and individual property included. — As- signments may be made by copartners of the partnership prop- erty for the payment of their partnership debts, and by indi- viduals of their interest in the copartnership for the benefit of their creditors {ante, §§ 125, 127), but assignments are also fre- quently made in which firm and individual property is assigned for the paj'ment of firm and individual debts. An assignment made by copartners reciting tlieir copartner- ship and their indebtedness as such, and purporting to convey all their property, will be deemed to assign only that which was the joint partnership property, and not any of their individual property. Morrison v. Atwell, 9 Bosw. 503, 510. In the Matter of Davis, 1 How. Pr. N. S. Y9, where the assignment was made by copartners, but contained no specific reference to individual property or debts, it was held that it should not be construed as intending to provide for individ- ual creditors or to convey the individual assets. Such an assignment may properly be executed in the firm name. Klumpp V. Gardner, 111 ]S". Y. 153 ; Hooper v. Baillie, 118 N. Y. 413 ; Sherman v. Jenkins, 77 Supm. Ct. (70 Hun), 593. But in Beaker v. Leonard, 49 Supm. Ct. (42 Hun), 221 ; s. c. 3 State R. 765, where the assignment recited that it was made by copartners, and conveyed all the property of the parties of the first part, with directions for the payment of individual debts, it was held that the title to the individual property of the assignors passed under the assignment. Citing Eastwood v. Ward, 35 Law Times, N. S. 502 ; Williams v. Hadley, 21 Kan. 350 ; 6. c. 30 Am. R. 430 ; Judd v. Gibbs, 3 Gray, 539. Although the Assignment Act of 1877 relates to general as- § 190. J riBM AND INDIVIDUAL ASSIGNMENTS. 221 signments only, by which is understood a conveyance of the whole body of a debtor's property, yet an assignment by the members of a firm of the firm property is within the Act, although the individual property of the partners is not included in the conveyance. Royer Wheel Co. v. Fielding, 101 N. Y. 504 ; s. 0. 2 Cent. R. 512 ; res^'g 38 Supm. Ct. (31 Hun), 274. It is no objection to an assignment of joint or copartnership property, that it does not include the individual property, or that it directs that the residue after payment of the copartner- ship debts should be returned to the assignors without making provision for the payment of the individual debts of the part- ners. Bogert v. Haight, 9 Paige, 297, 301, 302 ; see CollomT) v. Caldwell, 16 N. Y. 484 ; s. c. as Collumb v. Head, 24 K. Y. 505. When the assignment does include both firm and individual property, the fund created by the disposition of the property is not an entire fund to be distributed indiscriminately, but the proceeds of the firm and individual property severally create several funds which are to be separately administered. Thus, Mr. Justice Robertson, in Scott v. Outhrie (10 Bosw. 408, 426 ; s. c. 25 How. Pr. 512), in discussing the questions raised under such an assignment, says : " The order of equities of partnership and individual creditors in partnership funds, virtually divides them in two parts ; one being so much as is necessary to pay the former, and the other the residue sub- ject to equities between the partners for over-contributions in paying debts, or over-drafts of their shares of the profits. They are as distinct in their nature as two kinds of property, and although joined in an assignment of them, for difEerent pur- poses, by one instrument, motives in regard to the disposition of one thereby cannot be made to operate on the disposition of the other, in regard to which no such or similar motive exists. The error arises from considering the property assigned entire, the creditors of the firm and individual partners as one body having equal rights, the instrument as one, and the purpose as to the whole, single." " It is an established and a very just and reasonable doctrine," says Mr. Justice Duer, in Nicholson v. Leavitt (4 Sandf. 252, 299), " that when a partnership becomes insolvent, all its assets, 222 GENERAL ASSIGNMENTS. [cH. Xn. using the terra in its largest sense, must be applied exclusively in the first instance to the payment of the partnership debts, so as to confine the remedy of the separate creditors of each partner to the share of their debtor, in the surplus that may remain after the debts of the firm have been satisfied." For a careful collection and examination of the cases in sup- port of the rule that individual property of a partner should, in equity, be applied primarily to the payment of the individual debts of the partner. See Davis v. Ilmoell, 33 N. J. Eq. 72 ; s. c. 1 Am. Insol. R. 357, Runyon, Chan. When an assignment is made by partners, of their firm and individual property, for the payment of their firm and individual debts, the individual creditors of one partner are entitled to pay- ment of tiieir claims in full, with interest to the date of payment, from his individual estate, before the surplus of such estate is applied to the payment of the claims of firm creditors. Mat- ter of Duncan^ 10 Dal 3', 95; s. c. sub. nom. In re Shipman, 1 Am. Insol. R. 413. § 191. Assignment of firm property providing for payment of individual debts. — The appropriation in an assignment by an insolvent firm, of partnership property to the payment of the separate debts of one partner, renders the assignment fraudulent and void as against firm creditoi's. Booss v. M<(non, 129 N. Y. 536; aff'g 35 State R. 710; Durant v. Pierson, 124 N. Y. 444 ; Nordlinger v. Anderson, 123 N. Y. 544 ; Bulger v. Rosa, 119 N. Y. 459 ; Roe v. HH7m, 79 Supm. Ct. (72 Hun), 1 ; Citizens' Bank v. Williams, 35 State R. 542 ; Kat'l Banh of Granville v. Cohen, 6 State R. 31S ; Schifle V. IL-alj/, 61 How. Pr. 73 ; s. c. 10 Daly, 92 ; Wind- m nlhr v. Dodge, 67 How. Pr. 253 ; First JSfafl Bank v. Hal- strd, 20 Abb. N. C. 155 ; Friend v. Michaelis, 15 Abb. N. C. 354 ; /w^). d- Trader.^ Nat. Bk. v. Burger, 6 N. Y. Supp. 189 ; Wilso?! V. Robertson., 21 N. Y. 587 ; JIurlbert v. Deam,, 2 Abb. Dec. 428 ; see also Graver v. Wakeman, 11 Wend. 187 ; Jackson v. Cornell, 1 Sandf. Ch. 348 ; Egberts v. Wood, 3 Paige, 517 ; Cox v. Piatt, 32 Barb. 126 ; Lester v. Pollock, 3 Robt. 691 ; Kemp v. Carnley, 3Duer, 1 ; Walsh v. Kelly, 42 Barb. 98. § 191. J ASSIGNMENTS OF FIRM PROPERTY. 223 This question was first raised in the leading case of Grover V. Wakeman, supra, but was not passed upon. See re- marks of Senator Edmonds, p. 206. In Kirby v. Sohoonmalcer (3 Barb. Oh. 46), Chan. Walworth expressed the opinion that if the copartners were insolvent and unable to pay the debts of the concern, either out of their copartnership effects or of their individual property, an' assignment of the property of both to pay the individual debt of one of the copartners only, would be a fraud upon the joint creditors. But under the facts of that case the opinion does not seem to have been essential. In Nicholson v. Leavitt (4 Sandf. 252, 299), Mr. Justice Duer was clearly of the opinion, that where a preference was given to separate creditors in an assignment of partnership property, partnership creditors have unquestionable title to relief in equity. He was of the opinion, however, that the illegal provision did not vitiate the whole instrument, but was itself simply void. This case was re- versed on appeal on another ground. The question was distinctly presented to the Court of Appeals, in 'Wils(m v. Robertson, 21 N. T. 587. In that case the assign- ment was made by insolvent copartners, of their firm and indi- vidual property, directing that out of the proceeds of the assigned property certain debts of one of the partners should be paid before all the partnership creditors were paid in full. Mr. Justice Wright, in delivering the opinion of the court, said (p. 592) : " It will be conceded that the creditors of the firm are, legally and equitably, first entitled to the partnership effects. Such creditors have a claim upon the joint effects prior to every other person, which the court will enforce and protect alike against the individual partners and their creditors. Indeed, the partnership property must be exhausted in satisfying part- nership demands before resort can be had to individual property of the members of the firm. The firm is not liable for the private debts of one of its members, nor is there any liability resting upon the other members in respect to those debts. An appropriation of the firm property to pay the individual debt of one of the partners is, in effect, a gift from the firm to the part- ner — a reservation for the benefit of such partner, or his cred- itors, to the direct injury of the firm creditors. Can it be rea- sonably doubted that, when an insolvent firm assign their effects 224 GENERAL ASSIGNMENTS. [cH. XII. for the payment of the private debts of a member, for which neither the firm nor the otlier members, nor the firm assets nor the interests of the other members therein, are liable, such an assignment and appropriation are a direct fraud upon the joint creditors of the assignors?" It was held that the assignment was wholly void as to partnership creditors,, as having been made with the intent to defraud them. In Knauth v. Bassett (34 Barb. 31), where the assignment was of individual and firm property, with preferences to certain individual creditors, it was thought that, giving full force to the decision in Wilson v. Robertson, the assignment was not fraudulent and void on its face. Mr. Justice Sutherland remarked (p. 36) : " If in fact the assignment included sufficient individual prop- erty of each partner to pay his individual debts to be paid by the assignee, I do not think that the case of Wilson v. Hobertson goes to the extent of holding that the assignment would be fraudulent, although in that case it would appear that the joint assignment included some individual property of the partner whose creditors were preferred. " As a question of fact, however, the court found that the individual property assigned was not sufficient to pay the individual debt preferred. In Hurlhert v. Deem (2 Abb. Dec. 428 ; s. c. 2 Keyes, 97), the case of Wilson v. Hobertson was followed and approved, and it was further decided that the preference of individual debts in such an assignment, created a presumption of fraud which ren- dered the assignment fraudulent and void upon its face, and that the burden of showing the non-existence of such debts rests on the parties claiming under the assignment. In Booss V. 2[ario)i, 129 N". Y. 536 ; aff'g 35 State E. 710, an assignment of firm property, after providing for the payment of certain preferred debts, directed the assignee to pay " all the debts and liabilities now due or to grow due from the par- ties of the first part, together or respectively, with all interest moneys due or to grow due," and if the residue should not be sufficient to pay in full, then to apply it to the payment of said debts and liabilities ratably and in proportion. It was held that this language did not permit of a construction which would limit the application of the firm property to the primary payment of the firm debts, but that the fund was to be applied indiscrimi- §192.] ASSIGNMENTS OF FIRM PROPERTY. 225 nately to the payment of firm and individual debts, and that the assignment was, for that reason, fraudulent and void. In Roe v. Hume, 79 Supm. Ct. (72 Hun), 1, very similar language was used, and the assignment was likewise declared invalid. In Grook V. Rindshopf, 105 N. Y. 476 ; rev'g 41 Supm. Ct. (34 Hun), 457, it was held that a fair interpretation of the language of the assignment did not require the application of firm prop- erty to the payment of individual debts, and that, in any event, the amount of the individual obligations was relatively so small as to repel any presumption of a fraudulent intent. In Citizens' Bank v. Williams, 128 N. Y. 77 ; rev'g 35 State K. 542, partners had given their joint and several promissory notes for an indebtedness due by one partner, the other partner sign- ing as surety. In an assignment subsequently executed by the firm there was a direction to pay these notes. It was held that it was not a fraud to appropriate the firm property to the pay- ment of debts for which all the partners were liable, although the indebtedness did not arise in the business of the firm and did not constitute a firm debt. See Bernheimer v. Riiidslwpf, 116 N. Y. 428, 438 ; Saunders v. Reilly, 105 N. Y. 12, 18. The preference of an individual debt out of firm assets, effected by a payment to the individual creditor prior to and in contemplation of a general assignment, is indicative of a fraudu- lent intent in making the assignment. Sehioab v. Kaughra/n, 42 State E. 407 ; Chamlers v. Smith, 67 Supm. Ct. (60 Hun), 248. See Goodrich v. Glwte, 3 N. Y. Supp. 102. In Ransom V. Yam, Deventer (41 Barb. 307), where a division was made by the partners of partnership assets, and then each partner applied the portion set off to him, in payment of his individual debts, the partnership being insolvent, this was held to be a fraud upon the partnership creditors. See also Menagh v. Whittvell, 52 ISr. Y. 146. Only a firm creditor can complain of an appropriation of firm assets to the payment of the individual debts of the assignor. Haynes v. Brooks, 116 IST. Y. 487 ; aff'g 49 Supm. Ct. (42 Hun), 528 ; Grooks v. Rindskopf, 105 JST. Y. 476 ; Williams v. Whedon, 109 Id. 333, 338. § 192. Firm equitably liable for individual debts. — When 15 226 GENERAL ASSIGNMENTS. [CH. XII. it is made to appear that the firm is equitably liable for the indi- vidual debts, the appropriation of the firm property to their pay- ment will not render the assignment fraudulent. Thus in Durant v. Pierson, 124 IST. Y. 441, where a surviv- ing partner borrowed money from a bank, which was used in the payment of firm obligations, it was held that an assignment subsequently made by the surviving partner was not rendered in- valid by a preference to the 'bank, for although the bank was not a firm creditor, yet its claim represented the firm debts which its funds had paid. So in Nordlinger v. Andcrtton, 123 X. Y. 511, where one partner on his individual note borrowed money, which was put into the firm business, and the firm subsequently, and before it became insolvent, gave its note for the indebtedness, it was held that a preference of the note in a subsequent assign- ment of the firm property did not invalidate the assignment. See Gorhaiii v. Innis, 115 N. Y. 87. So in Peyner v. Mi/ers, 135 N. Y. 599, where an incoming partner was deemed to have assumed the obligations of the prior firm, it was held that a preference of a debt of the prior firm in an assignment made by the new firm was not fraudulent as to the creditors of the new firm. Farther illustrations of the rule will be found in Denton v. Mer-riU, 50 Supm. Ot. (43 Hun), 224 ; Haynes v. Broohs, 8 Civ. Pro. 106 ; ^feCarthy v. Fitts, 20 Wkly. Dig. 225 ; Bui- ger v. 7?rAy^ 119 N. Y. 459 ; HwrTbert v. Dean, 2 Abb. Dec. 428. But see (Jhaiahers v. Smith, 67 Supm. Ct. (60 Hun), 248. § 193. Assignment of individual property providing for payment of firm debts. — Whether an assignment by a copart- ner of his separate property, directing the payment of the firm debts in exclusion of or in preference to his individual creditors, will be sustained, has given rise to some conflict of opinion. The question was first presented to Vice-Chan. Sandford, in J((cJiS(in. V. Cornell, 1 Sandf. Ch. 348. He examined the ques- tion on principle, and arrived at the conclusion that such a preference rendered the whole transfer void. The decision was placed upon the rule of equity, requiring the application of part- nership property primarily to the payment of partnership debts, and of individual property to the payment of individual debts. § 193.J ASSIGNMENT OF INDIVIDUAL PROPERTY. 227 It was said that an assignment which attempts to carry out, through trustees, a principle which a court of equity wilj never permit any fiduciary to carry out, is a fraud upon the court and upon the law which tolerates assignments. In Kirby v. Sohoonmaker (3 Barb. Ch. 46), which was de- cided a few years later, the assignment was of both firm and individual property. The assignment provided first for the payment of a partnership debt, and then for the payment, out of one of the partner's joint and separate portion of the pro- ceeds, of a debt for borrowed money, a part of wliich was the separate debt of the partner and the residue the debt of the firm. It also provided for the payment out of the other part- ner's joint or separate portion of the proceeds of a debt due by him. The chancellor sustained the assignment. He laid down the rule without qualification that copartners may assign their individual property as well as their partnership property to pay the joint debts of the firm ; thereby giving the creditors of the firm a preference in payment out of the separate estate of the assignors over the separate creditors. See remarks of Mr. Jus- tice Brown in reference to this case in HurTbert v. Dean, 2 Abb. Dec. 428, 433. The case of Kirby v. Sehoonmaker (suprcc) was followed and approved in Ycun Rossum, v. Walker (11 Barb. 237) and G'Neil v. Salmon (2.5 How. Pr. 246). In the case last cited, Mr. Justice Allen distinguishes this class of cases from those wliich come within the rule established in Wilson v. Jioh- ertson (21 N. Y. 587). An a.ppropriation of partnership prop- erty to the payment of an individual debt of one of the members of the firm is an appropriation of the property of the firm to the payment of a debt for which some of the members of the firm are not liable. But neither the reason nor the rale applies to an appropriation of individual property to the payment of a firm debt, for the reason that each partner is individually liable for the payment of all the firm debts. Nor is there any rule of equity which gives to the creditors of the individual members of the firm a lien upon their individual property while it is still within their control. Brown, J., in Ifurlbert v. Dean, 2 Abb. Dec. 428, 435 ; see Haggerty v. Granger, 16 How. Pr. 243 ; HoA/nes v. Broohs, 49 Supm. Ct. (42 Hun), 528 ; affi'd 116 IST.Y. 487 ; Smith v. Ferine, 17 State R. 226 ; affi'd 121 N. T. 376. 228 GENEKAL ASSIGTSTM KNTS. [cH. XII. And it may now be regarded as settled that, an insolvent mem- ber of a firm may devote his individual property to the pay- ment of firm debts to the exclusion of his individual creditors. Orooh V. Bindsliopf, 105 N. Y. ilQ ; Sawnders v. Reilly, 105 N. T. 12 ; Eoyer Whcd Co. v. Fielding, 101 N. Y. 504 ; Ilaynes v. Brooks, sujjnt y Ralph v. Brirkell, 28 State R. 446 ; Smith V. Ferine, 17 State R. 266 ; affi'd 121 N. Y. 376 ; Becl^er V. Leonard, 49 Supm. Ct. (42 Hun), 221, 224 ; SmUh v. Claren- don, 3 Silv. (Supm. Ct.) 136. But an assignment of individual property for the payment of partnership debts, reserving the surplus to the grantors, without any provision for the individual creditors, where there are such, is fraudulent and void as against an individual creditor. This is illustrated by the case of Collomh v. Caldwell (16 N. Y. 484), where partners holding certain real estate as tenants in common assigned it, with other property, for the payment of the finn debts, reserving the surplus. This case was again before tiie Court of Appeals as CoUundj v. Bead (24 N. Y. 505), and it having then been shown that the real estate assigned was part- nership property, the assignment was sustained. When a creditor of a firm has obtained judgment against the partners, he may then maintain a creditor's bill to reach the indi- vidual property of a partner which had been fraudulently trans- ferred, and it seems that he may do this notwithstanding that there are individual creditors of the partner. Boyer Wheel Co. V. Fielding, 38 Supra. Ct. (31 Hun), 274. Where one of the members of a firm of bankers was treasurer of a railroad company, which company deposited its funds with the firm, and both the firm and the individual members executed assignments, it was held that the railroad company was not an individual creditor entitled to share with other individual credi- tors in the assigned estate of the individual member. N. Y.,F.d B. B. B. Co. V. BlMn, 114 N. Y. 80. § 194. Payment of individual debts out of the joint fund. • — It has sometimes happened that assignments of firm and indi- vidual property, after providing for the payment of partnership debts, have directed the payment of the debts of the several indi- vidual partners out of the total residuum remaining. In that § 195. J DEBTS DUE A PARTNER. 229 event, if the balance belonging to the several partners upon a settlement of the partnership affairs is not in exact proportion to the debts due by them severally, the result of such a provision must necessarily be to appropriate the property of some one of the partners to the payment of debts not owing by him. This was the case of Of Neil v. Saknon (25 How. Pr, 246), and the court there held that it was a palpable fraud which vitiated the assignment. And it was further held, that the fact that there may be no surplus after the payment of the partnership debts, and therefore no actual diversion and misapplication of the indi- vidual property of either, cannot aid the assignment. But in the case of Turner v. Joajcox (iO N. Y. 4Y0), where the facts in this respect were similar, for the purpose of overcoming the pre- sumption of fraudulent intent, each of the assignors was per- mitted to testify that he owed no individual debts and owned no individual property, and this was deemed sufficient. Such an assignment is undoubtedly voidable by individual creditors, but not by partnership creditors, since they are in no way prejudiced by the illegal provision. In Crook v. Rindshopf, 105 N. Y. 476, it was held that when the individual assets were insignifi- cant in amount that the inference of fraud arising from their having been placed in a common fund for the indiscriminate pay- ment of individual creditors was repelled. Scott v. Outhrie, 10 Bosw. 408 ; s. o. 25 How. Pr. 481, 512 ; Morrison v. Atwell, 9 Bosw. 503 ; Smith v. Howm'd, 20 How. Pr. 121. The cases cited above must be taken as overruling Eyre v. Beebe (28 Plow. Pr. 333), so far as that case holds that a direction to an assignee, after payment of partnership debts, to pay the private and individual debts of each assignor out of the common fund, is not illegal. In that case the court held that the direction being to pay out of the remaining proceeds, the assignee would be presumed to pay the private debts of each partner out of his portion of the pro- ceeds, and such w.ould be taken to be the effect of the convey- ance, unless an express provision to the contrary appeared. § 195. Provisions for the payment of debts due a partner or in which a partner has an interest. — When a firm was in- debted to one of its partners for goods sold to it by him, and both the firm and the individual partner executed general assign- 230 GENERAL ASSIGNMENTS. [CH. xn. ments for the benefit of their respective creditors, it was held, on an accounting of the firm assignee, that the debt due to the partner could be paid only after all the other creditors of the copartnership had been fully paid. Hatter of Hieser, 26 Supm. Ct. (19 Hun), 202. The principle of this decision would invali- date an assignment providing for the payment from firm assets of a debt due one of the members of the firm. And the rule is that a provision for the payment of a debt due to one partner out of firm assets will invalidate a general assignment by the firm. WMtneij V. Elrsch, 46 Supm. Ct. (39 Hun), 325 ; Chambers v. Siiuth, 67 Supm. Ct. (60 Hun), 248; Clafllii^. Eirach, 19 Wkly. Dig. 248. See Smith v. Siinth, 136 IST. Y. 313 ; affi'g 39 State R. 46 ; Durant v. P'lerson, 124 N. Y. 444 ; Denton v. Merr'dl, 50 Supm. Ct. (43 Hun), 224 ; Peyser v. Myers, 135 JST. Y. 599 ; Bemhehner v. lllndslopf, 116 N. Y. 428. For an instance of a claim by a firm against the funds arising out of an assignment by an individual member, see Cheever v. Bnnni, 40 State R. 610 ; s. c. 128 N. Y. 670. This rule does not necessarily include an indebtedness due to a firm in which one or more members of the assigning firm are partners. In PecMain v. Matti.son, 15 Abb. N. C. 367, n., it was held that when the assigning firm was indebted to an independent firm composed of two of the members of the assigning firm it might properly prefer such indebtedness. Lindley on Part., 2d Am. ed , p. * 725 ; Parsons on Part., 4th ed., § 401 ; Story on Part., 7th ed., § 394 ; Ex parte St. Barbe, 11 Yes. 413 ; Expa/rte Castell, 2 Glyn & J. 124. It has been said (Wait on Fraud. Conv., 2d ed., §329), that the case of P\i:nsliawe v. Lane (16 Abb. Pr. 71) asserts the absolute right of an assigning firm to prefer such debts. That case, how- ever, went no further than to hold that when a limited partnership was preferred in an assignment executed by a general partner- ship in which the members of the limited partnership were also members, that a creditor of the limited partnership could not avail himself of the invalidity of the assignment executed by the general partnership. Although the referee who decided the case (Alex. W. Bradford) expressed the opinion that such a prefer- ence did not invalidate the assignment, either as creating a trust for the benefit of the assignor or as having been made with the §196.] ASSIGNMENT AFTER DISSOLUTION. 2B1 intent to hinder and delay creditors, an attempt to prefer a part- ner in either a general or a special copartnership, for the amount contributed by him as capital to the firm business, will invalidate the assignment. Whitoomh v. Fowle, 7 Abb. N. C. 295 ; s. c. 10 Daly, 23 ; aaflin v. Birsoh, 19 W'kly Dig. 248. Where a firm, being solvent, gave its notes in settlement of an account with another firm composed of some of the same mem- bers, which notes were made payable and delivered to the wives of such members, as gifts from their husbands, and the firm mak- ing the notes subsequently assigned for the benefit of creditors, preferring the wives for the amount of the notes, it was held that a judgment-creditor of such firm could not maintain an action to set aside the assignment as fraudulent because of the preferences. First Nat. Bk. v. Wood, 128 N. Y. 35 ; s. c. 38 State Rep. 422 ; rev'g 52 Supm. Ct. (45 Hun), 411. A preference given for an indebtedness for money loaned to the firm by one partner as administrator of an estate is not fraudu- lent as being a provision for the benefit of that partner where it appears merely that he was one of the heirs of the decedent, but not that he had any interest in the estate at the time of the assignment. Kennedy v. Wood, 59 Supm. Ct. (52 Hun), 46. § 196. Assignment by partners after dissolution. — Where, upon dissolution of the firm, the joint property is transferred to one of the firm, the effect of such transfer as between the part- ners is to vest the title to the property in the individual partner, with the right to use and dispose of it as his separate estate. Dimon v. Hazard, 32 N. Y. 65. And if the conveyance is made in good faith, and without any intent to defraud the credi- tors of the firm, or to deprive them of their legal or equitable claims upon the joint estate in case of insolvency, the property becomes separate estate, wholly free from any claims of joint creditors, and the individual partner may make an assignment of it for the payment of his individual debts. 8tam,ton v. Westover, 101 N. Y. 265 ; Dir)ion v. Hazard, supra ; Menagh v. Whit- well, 52 N. Y. 146. Accordingly, where I., T. & S. were part- ners, and I. sold out in good faith to T. & S., and received from them upon the sale their note, and T. & S. continued the business as partners and then failed and made a general 232 GENERAL ASSIGXJIENTS. [CH. XII. assignment preferrius; this note and providing for the payment pro rata of the debts of the old and new firm, it was held that the creditors of the old firm had no equity against the partner- ship property of the old firm in the hands of the new firm or their assignee, and that the preference of the note was not fraudu- lent. Siidtli V. Howard, 20 How. Pr. 121 ; Mattlson v. Bema- rest, i Robt. 161 ; Friedhurger v. Jaberg, 11 State E,. 718 ; Bate>i V. MoXidty, 4 State R. 646 ; Durfee v. Bumj), 20 State R. 833 ; Gorhura v. Innis, 115 IST. T. 87 ; Matter of Dawson, 66 Snpm. Ct. (59 Hun), 239 ; Wecwer v. White, 46 State R. 467. The lo7ia fides of the purchase of the firm assets is the controlling factor, and to this Finch, J., says in Stanton v. Westover, supra, " The insolvency of the purchasing partner, if known to him and to the seller, might very well be strong evidence of an intent to defraud the partnership creditors, and become conclusive upon that question if there was no explanation." In Crane v. Roosa, 47 Supm. Ct. (40 Hun), 455, where it appeared that when the firm was insolvent one of the partners bought out the other, paying him a sum of money and assuming the firm debts, of which he paid a part, and then made an assignment in which he preferred his individual creditors, it was left the jury to determine whether it was the intention of the purchasing partner to obtain the firm property so that he might prefer his individual creditors out of the proceeds, with the in- struction that if such was the intent the assignment was fraudu- lent as to the firm creditors. Landon, J., dissenting, was of opinion that the assignment -was absolutely fraudulent by reason of the existing insolvency at the time of the purchase and of the assignment. To the same effect is Burhans v. Kelly, 17 State R. 552. In Bulger v. Bosa, 119 N. Y. 459, 465, the general principle is stated by Andrews, J., as follows : " There can be no controversy as to the rule of law governing the relations between an insolvent firm and its creditors, and their mutual rights in respect of the firm property. The part- nership as such has its own property and its own creditors, as distinct from the individual property of its members and their individual creditors. The firm creditors are preferentially en- § 196.J ASSIGNMENT BY PARTNER AFTER DISSOLUTION. 233 titled to be paid out of the firm assets. Whatever may he the true foundation of the equity, it is now an undisputed element in the security of the firm creditors. The insolvent firm cannot apply the firm assets in payment of the individual debts of the partners, nor can the equity of the firm creditors be defeated by an attempted conversion of the assets of the firm into the indi- vidual assets of one of the partners through a transfer by one partner of his interest therein to the other. In either of the cases supposed, they would remain, as to the firm creditors, firm assets, which could be followed and taken on execution by the firm creditors, until they had come to the hands of a l}ona fide purchaser, and where an individual creditor of one of the mem- bers of an insolvent firm, knowing of such insolvency, takes a transfer of firm property in payment of his individual debt, his act is not merely a violation of an equitable right of the firm creditors, but it constitutes a fraud under the statute of Eliza- beth. The law regards it as a voluntary transfer made to hinder, delay and defraud the firm creditors, and as to them is void." In Lester v. Pollock (3 Robt. 691), where two of the mem- bers of a firm of three had purchased the share of the other part- ner, and then executed an assignment directing the assignee to pay off all the debts owing by the new firm and by the old firm, or by either of the members of said firms to a specified creditor, the assignment was declared void as to the creditors of the old firm. And where the conveyance of the firm property is not made in good faith, but with an intent to defraud the creditors of the firm, an assignment made by the purchaser preferring his own creditors will be declared void as to the firm creditors. Ileye v. Bolles, 2 Daly, 231 ; see Baton v. Wright, 15 How. Pr. 481. So, where one partner sold out to his copartner, taking in pay- ment his notes secured by mortgage, and the latter afterwards made a general assignment for the benefit of creditors, it was held that the mortgage was void as against firm creditors. Ha/rd v. MilUgom,, 8 Abb. N. C. 58. See Warner v. Zake, 37 State E. 799. CHAPTER XIII. FRAUD ON THE FACE OF THE ASSIGNMENT. § 197. Statutory provisions.^ — The validity of a general as- signment for the benefit of creditors, may be tested by its coq- f ormity to the statutory requirements as to its mode of execution (see ante. Chap. IX). An assignment of this character must be made, executed and acknowledged in the manner and according to the forms prescribed by statute. Kercheis v. Schloss, 49 Plow. Pr. 284, 287. If it is wanting in any essential requisite to its validity as a legal instrument under the statute, it will give the assignee no title to the property which may then be levied upon by judg- ment-creditors, or other remedies may be taken to prevent the assignee from carrying the trust into effect. Daly, F. J., in Place V. Miller, Abb. Pr. JST. S. 178, 180 ; Rennie v. Bean, 31 Supm. Ct. (24 Hun), 123 ; Smith v. Boyd, 3 Court Journal, 20 ; Jaffray v. MvGehee, 107 U. S. 361. And in be Camp v. Marshall (2 Abb. Pr. N. S. 373, 374), it was said, that when there is not a substantial and full compliance with the statute, the courts are bound, as matter of law, to con- clude that the assignment was made with intent to defraud cred- itors. In that case, a portion of the estate was suppressed for the purpose of diminishing the security required of the assignee, and he was directed to pay to a certain creditor, a sum larger than the amount due him, so that the assignment was fraudulent apart from the failure to comply with the statute. But whether the failure to comply with the requirements of the statute will render the assignment fraudulent, would seem to depend upon the character of the omission and the intent of the assignor. Tha v. Smith, 1 Am. Insol. E. 466. It does not follow that because the omission to do any or all of the acts required by the statute, may render an assignment in- § 198. J ASSIGNMENTS, HOW CONSTRUED. 235 operative and void, that it is thereby rendered fraudulent also. Scott V. Guthrie, 10 Bosw. 408 ; s. o. 25 How. Pr. 512 ; Tim v. Smith, 1 Am. Insol. E. 466 ; Denser v. Mundy, 5 Robt. 636. But, although an assignment may conform in every particular to the statutory requirements, it may nevertheless be fraudulent and void as against creditors, because made with the intent to hinder, delay and defraud creditors, and thus within the opera- tion of the statute of frauds. 2 E. S. 137 (4 E. S., 8th ed. 2592), §1. The instrument of assignment itself may furnish evidence upon its face of an attempt to hinder, delay or defraud creditors, or the evidence of such intent may arise from facts and circum- stances extrinsic to the writing, but in either case, when such fraudulent intent is established, the assignment is void. The purpose of this chapter is to present the various instances in which courts have held that provisions appearing upon the face of the assignment have furnished evidence of a fraudulent intent. Beside the statute of frauds, it will become necessary also to refer to another statute, sometimes called " the statute of per- sonal uses." Rome Exoh. Bmxk v. Fames, 4 Abb. Dec. 83, 95 ; s. 0. 1 Keyes, 588 ; Young v. HeermMns, 66 N. Y. 374. That statute provides, that " all deeds of gift, all conveyances, and all transfers or assignments, verbal or written, of goods, chattels, or things in action, made in trust for the use of the per- son making the same, shall be void as against the creditors, exist- ing or subsequent, of such person." 2 E. S. 135 (4 E. S., 8th ed. 2590), § 1. § 198. Assignments, how construed. — It has been said that assignments by debtors are not regarded with indulgence by the law ; that while the law gives a right of preference, a wholesome policy demands that this right should be watched with strict vigilance, and its exercise restricted to its narrowest limits. Mr. Justice Gierke, in Wilson v. Ferguson, 10 How. Pr. 175, 180. And it must be confessed, in not a few instances courts have apparently been more astute to discover grounds on which to set aside the assignment than to sustain it. See remarks of Eoosevelt, J., in Fh/ v. Oooh, 18 Barb. 612, 614. However this may be, the true rule of construction in reference to general 236 GENERAL ASSIGNMENTS. [cil. XIII. assignments as well as to all other written instruments, is ut res magis val<;at quani pereat. DarVuuj v. Boger.s; 22 Wend. 483. An assignment should be upheld, if the language permit it, rather than be defeated, and fraud is not presumed, unless fairly inferable. Brigliost, Chap. XY. But in the case of Milliken v. Dart (33 Supm. Ct. [26 Hun], 24), where a general assignment for creditors contained a provi- sion authorizing the assignee to compound with debtors and to sell on credit, the latter of which clauses has been frequently held to furnish absolute evidence of a fraudulent intent, under the statute of frauds, it was held, by the Supreme Court in the first department, that this did not furnish sufficient evidence of an intent to defraud creditors, to warrant the issuing of an at- tachment under § 636 of the Code of Civ. Pro. This decision appears to be open to question. It is difficult to perceive any reason for a different construction of the words " with intent to defraud," as used in the statute of fraudulent conveyances, and in the attachment laws, and no such distinction has heretofore been attempted, although such a distinction has been sustained in the construction of the section of the Code authorizing the issuing of an order of arrest. Hoyt v. Godfrey, 88 N. Y. 669. § 200. Void in part, good in part. — Where one or more pro- visions in assignment are adjudged to indicate an intent to hinder, delay, or defraud creditors, the fraudulent intent vitiates the whole instrument and not merely the obnoxious provision. Walcemam, v. Orover, i Paige, 23 ; s. c. sub. nom. Graver v. IVakeman, 11 Wend. 187 ; Hyslop v. Clarke, 14 Johns. 458 ; Fiedler v. Day, 2 Sandf. 594 ; Machie v. Cairns, 5 Cow. 547 ; CNeil V. Salmon, 25 How. Pr. 246 ; see Barney v. Griffin, 2 N. Y. 365, 372. The taint as to a part affects the entirety.. 240 GENERAL ASSIGNMENTS. [cH. XIII. O^Neil V. Salmon, 26 How. Pr. 246. Norton v. Matthews, 58 State E. 806 ; Nat. Banh of Ch^anville v. Cohn, 49 Snpai. Ct. (42 Hun), 381 ; Billings v. Eussell, 101 N. Y. 226. Where a conveyance is good in part and bad in part, as against the provisions of the statute, it is void in toto, and no interest passes to the grantee under the part which is good. Hyslop v. Clarice, 14 Johns. 458. Indeed, if the whole of the conveyance made in violation of a statute, is not held to be void merely be- cause it may be good in one particular, it would be very easy to elude the statute in every case. One good trust might always be inserted, so that what could not be accomplished directly would be attained indirectly, and in this manner the fraudulent purpose might be easily effected notwithstanding the statute, and the triumph of debtors over their creditors would thus be com- plete. Hyslop y. Clarke, snpra, 466. Another and a very satisfactory reason for the rule, is given by Mr. Justice Selden, in Jess^op v. Hulse, 21 N. Y. 108, 170. He says : " If he (the assignor) annex an improper condition, the court must pronounce the assignment itself void. It cannot hold the transfer good, and disregard the condition ; because that would be to take the property from the assignor against his will. He having consented to part with his title only upon certain condi- tions, the transfer and the condition must stand or fall together." A forcible illustration of the rule is found in the case of Fied- ler V. Day (2 Sandf. 594), where one of the preferred debts was fictitious, although another preferred debt and the unpreferred debts were all due in good faith, the court held the whole instru- ment fraudulent and void, and numerous other illustrations will occur in the course of the ]iresent chapter. Johnson v. Philips, 2 N. Y. Supp. 432. While there is great harmony in the cases in applying this rule to assignments which are rendered void by reason of fraudulent provisions establishing an intent to hinder, delay, or defraud creditors, yet when the trust created is void by other statutory enactments, a different rule has been applied. Thus, an assignment of real estate for the benefit of creditors, upon trust to sell or mortgage the same, and apply the proceeds to the payment of debts, is a valid instrument under the statutes of uses and trust as to the trust to sell, notwithstanding that the § 201.] GOOD AS BETWEEN THE PARTIES. 241 trust to mortgage, being for the benefit of creditors at large, is void. Darling y. Rogers, 22 Wend. 483 ; rev'g s. c. as Rogers v. De Forest, 7 Paige, 272. ' ' There can never be any diffi- culty," says Verplanck, Senator, in this case (^22 Wend. 483, 494), " in applying this construction of the statute, where the two trusts are wholly separate though in the same instrument ; as where part of the" land is conveyed to one purpose, that being a valid one, and part to another and an invalid one, or where tlie whole is assigned first for a valid trust, and that failing, to some void purpose. But when the purposes are in the alternative, or when they are mixed and complicated together, the separation of the good and the bad may not be ob- vious, and sometimes not possible. When the void part is so complicated with a trust otherwise valid, as to form an essential part of tlie intent and object of the person creating it, it may vitiate the whole, because the trust may be in fact single, though composed of several parts, one of which is void. . . . The pre- vailing doctrine of equity (and in many cases of our common and statute law also), is that when good and bad provisions are mixed in a deed, the good shall be saved so far as consistent with proba- ble intent." So, where the assignment is assailed under 2 R. S. 135, § 1, as creating a trust for the assignor, the statute avoids only so much of the grant as is not sustained by the valid purposes for which it was made. It does not avoid the entire instrument which con- tains the invalid use. Curtis v. Leavitt, 15 N. Y. 9, 176 ; Rome Exch. Bank v. Eames, 4 Abb. Dec. 83 ; s. c. 1 Keyes, 588 ; Barney v. Griffin, 2 N. Y. 365, and see this case commented upon and distinguished in Campbell v. Woodworth, 24 N. Y. 304 ; see, also, Yan Veghten v. Van Veghten, 8 Paige, 104, 119 ; Be Kay v. Irving, 5 Den. 646 ; affi'g s. c. sub. nom. Irving v. DeKay, 9 Paige, 521. § 201. Good as between the parties. — It should be remarked also, in this connection, that a fraudulent provision in an assign- ment does not render the instrument void as between the assignor and the assignee, but only as to those creditors who do not con- sent to it. Smith V. Howard, 20 How. Pr. 121 ; see Wait on Fraud. Conv. chap. xxvi. The conveyance, though void as to 16 242 GENERAL ASSIGNMENTS. [CH. XIII. creditors, is good against the grantor and his representatives. Storm V. Davenport, 1 Sandf. Ch. 135 ; Mackie v. Cairns, 5 Cow. 547 ; Morrison v. Brand, 5 Daly, 40 ; Ogden v. Prentice, 33 Barb. 160 ; Sweet v. Tinslar, 52 Barb. 271 ; SUwart v. AcUey, 52 Barb. 283 ; Waterlury v. Westervelt, 9 N. Y. 598, 605 ; Oshorne v. Moss, 7 Johns. 161 ; Jackson v. Cadwell, 1 Cow. 622. An assignment in due form is valid as between the parties to it, and upon the acceptance of the trust the assignee becomes bound to execute its directions. If fraudulent as against creditors it is only voidable by adjudication at their election or that of someone of them, and until an attack is made with a view to such a judicial deteimination it will be treated as valid and must be executed accordingly. Hence where an assignee had paid pre- ferred creditors, and the assignment was afterward set aside at the suit of a judgment creditor, it was held that the preferred creditors so paid could not be compelled to refund the payment. Enower v. Cent. Nafl Bank, 124 N. Y. 552. Equity will give no relief to the fraudulent grantor against the grantee by directing an accounting and reconveyance. Sioeet v. Tinslar, supra; Stewart v. Ackhy, supra ', Mosely v. Mosely, 15 ]Sr. Y. 334. § 202. Indicia of fraud. — Tliere are certain provisions in con- veyances intended to defraud creditors, and certain circumstances attending the execution of such instruments which experience has shown often accompany a fraudulent intent. These are sometimes designated as " indicia of fraud," or " badges of fraud." See Bump on Fraud. Con. ch. 4. They create a sus- picion of fraud, and sometimes furnish conclusive evidence of a fraudulent intent. The provisions in general assignments which we are about to consider are of this class, and may not inappro- priately be designated as " indicia of fraud." §203. Assignments exacting releases.— Great conflict of opinion has existed in the courts of various States, as to whether an assignment by an insolvent debtor, which limited the right of creditors to participate in the benefits of an assignment by requir- ing a discharge and release of the debtor from his debts as a con- § 203. J ASSIGNMENTS EXACTING RELEASES. 243 dition to such participation, would be sustained. In some in- stances such assignments have been held valid. Lippincott v. Barher, 2 Binn. 174 ; Pearpoint v. Graham, i Wash. C. C. 232 ; Brashear v. West, 7 Pet. 608 ; McCall y. HinUey, 4 Gill, 128 ; Green v. Trieber, 3 Md. 11 ; Farquharson v. Eichel- lerger, 15 Id. 63 ; Whedbee v. Stewart, 40 Md. 414 ; Nightin- gale V. Harris, 6 R. I. 321 ; and see cases collected in Burrill on Assignment, 6th ed. § 148 et seq. ; see note to Lawrence v. Norton, 22 Am. L. Eeg. 264. But in this State it is now the settled law that assignments containing a stipulation for the release of the debtor, whether as a condition for receiving any benefit under the assignment or only as a condition of preference, are fraudulent and void. liyslop V. Clarke, 14 Johns. 458 ; Austin v. Bell, 20 Id. 442 ; Walceman v. Graver, 4 Paige, 23 ; s. c. 11 Wend. 187 ; Arm- strong V. Byrne, 1 Edw. Ch. 79 ; Lentilhon v. Moffat, 1 Id. 451 ; Mills V. levy, 2 Id. 183 ; Smith v. Woodruff, 1 Hilt. 462 ; Berry v. Riley, 2 Barb. 307 ; Chadwick v. Bvrrows, 49 Supm. , Ct. (42 Hun), 39. The ground of these decisions is well stated by Vice-chancellor McCoun in Armstrong y. Byrne (supra). He says : " A debtor in failing circumstances may lawfully assign his property for the benefit of his creditors, and prefer one creditor or a class of creditors. Bat he shall not fix terms or conditions in order to benefit himself, and likewise say to his creditors, ' you must sub- scribe to these provisions, or you sliall not touch the property.' Such conditions are inadmissible. He does not benefit himself by merely creating a preference of payment among his creditors, because he remains liable to the others until all his debts are paid ; but if he stipulates for an absolute discharge before a cred- itor shall have the benefit of the property, he thereby assumes to himself a power over the creditors for his own personal advan- tage, namely, of being discharged from his debts by a payment of a part only. And if he can be allowed to lock up his prop- erty by means of such an assignment until the creditors comply with his terms, he can successfully delay, hinder and defraud his creditors. ' ' In Chadwick v. Burrows, 49 Supm. Ct. (42 Hun), 39, a firm of two members having become insolvent, one of them abscond- 244 GENERAL ASSIGNMENTS. [CH. XIII. ed, the other, after calling a meeting of his creditors, with the approval of all but one of them, conveyed all the firm property to an assignee, who covenanted to pay each creditor fifty cents on the dollar of his claim. In an action brought by the creditor, who did not assent, to set aside the conveyance, it was held that it was not fraudulent, no release having been exacted, and it was also held that the creditor was entitled to recover from the as- signee fifty per cent, of his claim. § 204. Assignments preferring creditors who have agreed to execute releases. — Although the rule is thus fully estab- lished in reference to assignments in which preferences are given as a condition for the subsequent execution of a release, yet where the preference is given not conditionally but absolutely, not as a condition for a future release, but in consideration of a previous release and agreement, the same considerations do not prevail, and the assignment is not necessarily void. Sjpauld. ing V. Strang, 37 N. Y. 135 ; 38 Id. 9 ; rev'g 36 Barb. 310, and 32 Barb. 235 ; Low v. Graydon, 50 Barb. 414 ; Powers v. Graydon, 10 Bosw. 630 ; Renard v. Graydon, 39 Barb. 548 ; Renard v. Maydore, 25 How. Pr. 178. In the two first eases cited the question arose upon the same assignment. A firm being in insolvent circumstances, made a proposition to their creditors to pay fifty cents on the dollar in full satis- faction of their debts, and a portion of the creditors agreed thereto. Thereupon an agreement in writing was made by the firm with such creditors, by which the former agreed to pay and the latter agreed to accept of fifty per cent, of their debts in full satisfaction ; providing, further, that in case the firm should be unable to pay pursuant to the agreement, they should make an assignment, giving a preference, as specified in the agreement, of fifty cents on the dollar upon the debts of those who became parties to the agreement. Several creditors became parties, and executed releases of their debts to the firm. The firm was unable to make the payments according to the agreement, and made an assignment giving a preference of fifty per cent, upon the debts of those who had become parties thereto. The question was whether this made the assignment fraudulent. It was held that it did not, for the reason that it § 204.J ASSIGNMENTS EXACTING EELBASES. 245 was not found or proved that any coercion was used by the as- signors to induce the creditors to make the agreement, and for the further reason that, at the time the agreement was made, the assignors had made no disposition of their property ; that it was still subject to the remedy of creditors, and that under these cir- cumstances, the parties were at liberty to make any contracts they chose in respect to the terms upon which the indebtedness should be discharged. See these cases distinguished in Hay- dock V. Coope, 53 N. Y. 68, 74. The other cases cited arose upon an assignment executed by the firm of Graydon, McCreery & Co. The facts were some- what similar to those in the case above cited. The creditors had executed an agreement of compromise by which they agreed to accept fifty cents on the dollar within a specified time, in full discharge of their debts, whether the money was received by preferences in an assignment or other disposition of property (10 Bosw. 653). It was held that the agreement and an assignment subsequently executed were not parts of the same transaction (25 How. 179), and the fact that the creditors who had executed the agreement were preferred to the extent of fifty cents on the dollar, did not render the assignment void. The opinions ren- dered in the ease of Powers v. Graydon (10 Bosw. 630), are particularly instructive. Analogous to these cases is Hastings v. Belknap, 1 Den. 190. There a debtor entered into an arrangement with some of his creditors, by which an assignment of his property was made to trustees, in trust for his creditors, generally, and by which the trustees personally bound themselves to the debtor, to procure for him a release and discharge from all the creditors, except certain ones who were specified. It was held that the assign- ment was not conditional or partial, or liable to the objection of being intended to coerce a release from the creditors. The rule in reference to all this class of cases is well expressed by Mr. Jus- tice Kobertson, in Powers v. Graydon, 10 Bosw. 630. He says (p. 635) : " In fine, while a debtor is in possession of his property, he has a perfect right to agree to dispose of it as he thinks proper, in payment of lawful debts, and to use that power of disposition as a means of procuring favorable releases ; the moment he under- takes to put it out of his possession by a conveyance in trust, ^46 GENERAL ASSIGNMENTS. [CH. XIII. such instrument njust contain no clause coercive of creditors to release, under the peril of being held to be void. The mere hold- ing out inducements to creditors in this case to release for less than their claims, upon a promise to prefer them in an assignment, was a perfectly legitimate mode of negotiation." § 205. Preferences conditional upon other acts of cred- itors. — Conditions may be imposed upon creditors, limiting their right to a preference where the conditions are such as are not prejudicial to creditors, and are such as are in the line of their dutv. In Bellows v. Patridcje (19 Barb. 176), the assignment pre- ferred in the third class of creditors two notes made to one H., upon condition that H. accounted for certain collaterals. If he did not account for them, however, no portion of the assigned property was to be applied on these notes until all the residuary creditors were paid, except B. The notes were then to be paid, and B. 's claim was to follow. In any event, B. was to be paid last. It was held by the court tliat these provisions were noth- ing more than the exercise of the assignor's undoubted right to direct preferences and to prescribe the order in which the debts should be paid, and did not render the assignment void. And when A. borrowed the promissory note of B., agreeing to pay it at maturity, and give to B. his own note, payable at the same time. A. afterward indorsed the borrowed note to C, and becoming insolvent, made an assignment, providing for the pay- ment of B.'s note only on condition that B. should surrender the note of the assignor to be canceled. It was held that the two notes constituting but one debt, the condition did not coerce the creditor .or secure a benefit to the assignor so as to render the as- signment void. Oliver Lee cS; Co.^s Banh v. Talcott, 19 N. Y. 146. So where an assignment giving preferences to a first and sec- ond class of creditors, who were designated, provided that the assignee should, as soon as convenient, advertise in such paper or papers as he might deem best calculated to give information to the creditors, requesting them to render their claims to him at a reasonable time and place ; that the debts of the assignor which should come to the assignee's knowledge by the expiration of § 206. J TKCSTS WOR THE ASSIGNOR. 247 such time (not in the first two classes), should constitute the third class, and be paid ratably ; that all other debts should be paid after these. It was held not to be fraudulent. Ward v. Ting- ley, 4 Sandf. Ch. 476. § 2o5. Trusts for the assignor.— There can be no question, but that a conveyance which places an insolvent debtor's prop- erty beyond the reach of his creditors by legal process, and at the same time, either expressly or impliedly, creates a trust in the property for his own use. is void. This point was decided in the case of Goodrich v. Downs (6 Hill, 438) ; see Machie v. Cairns (5 Cow. 547, 548). The decision in Goodrich v. Downs was based upon the statute which prohibits the creation of a trust for the use of the person making the same. 2 R. S. 135 (4 R. S. 8th ed. 2590), § 1. And so far as the decision turned upon that statute, it was overruled in Curtis v. Deaviti, 15 N. Y. 9 ; see CoUomb V. Caldwell, 16 N. Y. 484 ; iSloan v. Birdsall, 65 Supm. Ct. (58 Hun), 317, 321. But the doctrine of the decision, to ■wit, that an assignment by an insolvent is void for actual fraud if it contains a reservation of benefit for the assignor, is undoubt- ed. See Collomh v. Caldwell, supra; Barney v. Griffin, 2 N. Y. 365. The construction placed upon tlie statute, in Curtis v. Lewoitt (15 N. Y. 9), is such that it would not ordinarily apply to assign- ments for creditors. It was there held that the statute applies only to conveyances and transfers, wholly or primarily for the use of the grantor, and not to instruments for other and active purposes, when the reservations are incidental and partial only ; that if it can be applied to instruments executed for real and active purposes, such as to secure debts or to procure money on loans, it avoids only so much of the grant as is not sustained by the valid purposes for which it was made. It does not avoid the entire instrument which contains the invalid use. But in Wilson v. Robertson (21 N. Y. 587, 594), which was ■ an assignment by a firm preferring certain debts of one of the partners, Mr. Justice Wright, who spoke for the court, seemed to be of the opinion that the assignment would be void under the statute referred to. And see McClelland v. Remsen, 36 Barb. 622 ; Powers w. Graydon, 10 Bosw. 630 ; Scott v. Guthrie, 248 GENERAL ASSIGNMENTS. [CH. Xm. Id. 408, 420 ; s. c. 25 How. Pr. 512 ; Rome Excli. Bank v. Fames, 4 Abb. Dec. 83, 95 ; Spies v. Boyd, 1 E. D. Smith, 445, 448 ; McLean v. Button, 19 Barb. 450 ; Sloan v. Bird- sail, 65 Supm. Ct. (58 Hun), "317, 321. § 207. Reservations of property. — A mere exception of property from the assignment, is a different thing from a reserva- tion to the debtor of a benefit from the assigned property. Thus, where certain speciiied property was exempted from the opera- tion of the assignment, the conveyance was not for that reason declared invalid. Carpenter v. Underwood, 19 N. Y. 520. So, in another case, where an insolvent debtor, in assigning his per- sonal estate for his creditors, authorized the assignees to use a judgment previously confessed by him to secure them against contingent liabilities as his sureties, for the purpose of perfecting title to his real estate, declaring that all that should be realized from the real estate should be assets in the hands of the trustees, to be distributed according to the terms of the assignment ; but he did not assign his statutory right of redeeming the land from a sale on the judgment, or his right to the rents and profits be- fore the expiration of the period of redemption. It was held that this was not such a reservation of property as vitiated the assignment. Bow v. Plainer, 16 N. Y. 562. In the case of Rose v. Meldrum (11 W'kly Dig. 354), where the assignors reserved certain property as exempt from execu- tion, but it did not appear that they were householders, it was held that the question, whether any of their property was re- tained under the claim of exemption, with intent to defraud, should be left to the jury. When the assignment on its face purports to transfer all the property of the assignors, the sched- ules subsequently filed in compliance with the statute amount to a representation that their contents disclose all the property of the assignors, with nothing omitted or concealed and hidden ; but an omission of existing assets from tlie schedule does not make the assignment void under the statute, ipso facto. The act of 1877 involves no such result. Shultz v. Hoagland, 85 N. Y. 464, 473. '-) 208. Reservation to assignor of a benefit out of the as- § 208. J BENEFIT TO ASSIGWOE. 249 signed property. — It has been declared a great many times with the greatest emphasis, that the reservation of any benefit to the assignor from the assigned property, will render the assignment fraudulent and void as against creditors not assenting. Grover v. Wakeman, 11 Wend. 187 ; s. c. 1 Am. L. Cas. 63 (5th ed. 68) ; Machie v. Cairns, 5 Cow. 547 ; Goodrich v. Downs, 6 Hill, 438 ; Judson V. Gardner, 4 N. T. Leg. Obs. 424 ; Lmtilhon v. Moffat, 1 Edw. 451 ; Hyslop v. Clarice, 14 Johns. 458 ; Nicholson v. Leavitt, 4 Sandf. 252, 273 ; Jackson v. Parker, 9 Cow. 73, 86 ; Mead v. Phillips, 1 Sandf. Ch. 83, 86 ; see note to Lawrence v. Norton, 22 Am. L. Eeg. N. S. 264 ; Means v. Dowd, 128 U. S. 273. Any devise to cover the property for the benefit of the as- signor, or to secure to him directly or indirectly any benefit, is fraudulent. Thus, when an assignor, the day before executing a general assignment, withdrew from the bank $573.12, and on the day of the assignment $125, and no part of the money came to the assignee, and no explanation was given of the disposition of this money, the assignment was declared fraudulent and void. White V. Pagan, 18 \\^'kly Dig. 358 ; see Chap. XIV., With- drawal of Assets. In Maokie v. Cairns (5 Cow. 547 ; s. c. 1 Hopk. 373), the assignment contained a provision that the assignees should pay to the assignor the sum of two thousand dollars a year for his sup- port ; this clause was declared to render the assignment wholly void. This and subsequent cases have reversed a contrary rul- ing in Murray v. Piggs, 16 Johns. 671 ; and Austin v. Bell, 20 Johns. 442. Tn Swift v. Hart, 42 Supm. Ct. (35 Hun), 128, the assignor transferred to his attorney certain judgments in consideration of services already rendered, also for services to be i-endered in the future and shortly afterward executed a general assignment, it was held that the transfer to the attorney was fraudulent as being a provision for the benefit of the assignor, and to the like effect are Norton v. MaMhews, 58 State E. 806, Matter of Gordon, 56 Supm. Ct. (49 Hun), 370. So where the assignor preferred a claim for rent accruing be- fore and subsequent to the assignment, for the purpose of secur- ing to himself and family the future use of a dwelling-house, the 250 GENEKAL ASSIGNMENTS. [CH. XIII. assignment was declared void. Elias v. Farley, 2 Abb. Dec. 11 ; s. c. 3 Keyes, 398 ; s. c. 5 Abb. Pr. N. S. 39. A stipulation that the assignor shall be permitted to transact business for a cer- tain period without any proceedings being taken against him, either at law or equity, avoids the assignment. Berry v. Riley, 2 Barb. 307. So where an assignment was made by one partner in an insolvent firm, to the other partner, of the property of the firm which could not be reached by execution, in trust to pay the assignor's expenses in obtaining the benefit of the insolvent act, and the costs of all suits that might be brought by the creditors of the firm, and for the payment of the creditors in a certain order, it was held that it was fraudulent and void. It was a palpable attempt by the partners to keep the property under their own control. Unless there was a surplus beyond the firm debts, the assignor had no interest in the partnership efiEects, which could pass by the assignment, so as to give any greater interest to the assignee than he before had. The only effect of the as- signment was to exclude the assignor from any control over the property. Sewall v. Russell, 2 Paige, 175. See ante, § 206. § 209. Resulting trust to the assignor. — When the property is conveyed in trust, generally for the payment of debts, after the object of the trust is accomplished what remains will revert to the assignor by operation of law. Wintringham v. Lafoy, 7 Cow. 735. And in conformity with this rule of law it has been held, that when the -assignment was for the equal benefit of all the assignor's creditors, allowing no exceptions, with no pref- erences, a provision that after all the creditors should be fully paid and satisfied, the surplus should be repaid to the assignor, is not improper. Ely v. Cook, 18 Barb. 612 ; Van.Rossum v. Walker, 11 Barb. 237 ; WintringhaTn v. Lafoy, nupra. But, as we have seen {ante, § 142), where the assignment is of all the property for the benefit of a portion only of the creditors, an express reservation of the surplus to the assignor will render the assignment void. Barney v. Oriffin, 2 N. Y. 365 ; Good- rich V. Boions, 6 Hill, 438 ; Lansing v. Woodworth, 1 Sandf. Ch. 43 ; Strong v. Skinner, 4 Barb. 546 ; and see Collomb v. Caldwell, 16 N. Y. 484. § 210. Reservation of powers to assignors. —An insolvent §211.J CONTINUING THE ASSIGNOE'S BUSINESS. 251 assignment reserving to the assignor power of revocation is void in judgment of law. Biggs v. Murray, 2 Johns. Ch. 565 ; s. c. sub. nom. Murray v. JRiggs, 15 Johns. 571 ; Reichenbach v. Winhhaus, 67 How. Pr. 512. And so also is an assignment which confers upon the assignor the power to alter the order or amount of preferences or of debts to be paid out of the assigned property. The debtor must settle the respective rights of the creditors under the assignment at the time of the transfer and cannot reserve the power to create preferences to himself or give it to the assignee. See ante, §§ 147, 188, and cases there cited. § 211. Provisions for continuing the assignor's business. — A provision in an assignment authorizing the assignees to con- tinue the business of the assignor will render the assignment void. Thus, where a part of the assigned property was unfin- ished machinery and engines in process of manufacture, and the assignment provided that the assignees should " pay any such sums of money as they might find proper and expedient, in and above the management of the said property or payment of hands employed or to be employed iji and about the same, or in the business of completing the manufacture of any of the said prop- erty, or fitting the same for sale, or of making up material, etc., so as to realize the greatest possible amount of money there- from," this clause was held to avoid the assignment. Dun- ham V. Waterman, 17 N. Y. 9 ; rev'g 3 Duer, 166 ; overruling Cunnvngham. v. Freeborn, 11 Wend. 240 ; Henton v. Kelly, 49 Barb. 536 ; Jones v. 8yer, 52 Md. 211 ; s. c. 1 Am. Insol. R. 289. An authority to the assignee " to manage and improve" the assigned estate, where the property consisted of a stock of goods, was held to render the assignment fraudulent and void upon its face. Sohlussel v. Willet, 12 Abb. Pr. 397 ; s. c. 34 Barb. 615. But where the assignment conveyed real estate heavily incum- bered, and authorized the assignees to manage and improve the assigned property, it was held that a fair construction of the lan- guage was, that the property was to be so managed and improved or ameliorated in respect to its condition as would be most bene- ficial for the estate and the creditors, and should not be regarded 252 GENERAL ASSIGNMENTS. [OH. XIII. as authorizing the assignees to retain the assigned property for the purpose of erecting buildings, making alterations and repairs upon the real estate, and to use the trust fund for such purposes, and thus to hinder, delay and prevent creditors from obtaining their just debts. HitchcocJi v. Cadmus, 2 Barb. 381. In Eobhiiis v. Butcher, 104 N. Y. 575, the assignment con- tained a provision to the effect that should it be necessary and to the better performance of the trust, the assignee should have authority to finish unfinished work, and complete buildings. The court held that this clause gave the assignee no independent discretion to continue the business of the assignor, but that he was subject to the control and supervision of the courts, which was not superseded or destroyed by the provision of the assign- ment. The right of the assignee to continue the business, irrespective of any express power in the assignment, will be considered here- after. § 212. Future liabilities. — A general assignment which con- tains a provision for the payment out of the proceeds of the as- signed property of future advances to the assignor, or of future liabilities which the assignees may assume for him, in preference to or to the exclusion of the debts which are due to creditors whose debts had been contracted previous to such assignment, is fraudulent and void as against such creditors. Barnum v. Hempstead, 7 Paige, 568 ; Lansing v. Woodworth, 1 Sandf. Ch. 43. A transfer of property by an insolvent in trust to secure the payment for services to be thereafter rendered, but which the person for whose benefit the transfer is made is under no present legal obligation to render, is void as against the creditors of the assignor. Swift v. Hart, 42 Supm. Ct. (35 Hun), 138 ; Matter of Gordon, 56 Supm. Ct. (49 Hun), 370 ; Stafford v. Merrill, 69 Supm. Ct. (ti2 Hun), 144 ; JVorto/i v. Matthews, 58 State E. 806. A sheriff assigned, for the benefit of his creditors, his fees due and to become due. One of the objects of the assignment was to indemnify his sureties against future misappropriation of moneys which should be collected on executions. The § 212.] FUTURE LIABILITIES. 253 assignment was held to be void. Vurrie v. Ilart, 2 Sandf. Ch. 353. And where the assignor preferred a creditor on a claim for rent, part of which was to accrue subsequent to the assignment, this was held to invalidate the assignment. Elias v. Farley, 2 Abb. Dec. 11 ; s. c. 3 Keyes, 39S ; s. c. 5 Abb. Pr. K S. 39. But a direction in an assignment authorizing the assignee to pay " debts due and to grow due" is not objectionable. It con- lines the payment to debts, etc., for which the assignor was then liable. It could not in any way be made to cover debts not then in existence. Van Bine v. Willett, 38 Barb. 319 ; s. o. 24 How. Pr. 206 ; see Butt v. Pech, 1 Daly, 83. A direction to the assignee to pay to certain preferred cred- itors " the sums of money which are or may be due to them," and afterward to pay the rest of the creditors " what may be due to them," is valid. Such an assignment is not objectionable on the ground that, under its provisions, a preferred creditor could purchase other demands than those he held at the time of the assignment, and thus secure a preference for them also. For the provision giv- ing a preference to the specified creditors for sums which " may become due to them," should be construed to apply to actual debts already owing to them, or contingent liabilities already in- curred by them, at the time of the assignment and thereafter to become payable. Nor is the assignment objectionable because it might exclude those creditors whose debts had become payable at the time of making the assignment. The direction to pay the rest of the creditors such sums as " may become due to them" cannot be construed to exclude the payment of claims already due. Head v. Worthington, 9 Bosw. ^\ 7. But if the intention was to secure debts or claims not then in existence, but which were afterward to be created, either by the assignor or the assignee, it would be void. Brainerd v. Dun- ning, 30 N. Y. 211 ; Sheldon v. Dodge, i Den. 217 ; Lansing v. Woodworth, 1 Sandf. Ch. 43 ; Swift v. Hart, 42 Supm. Ct. (35 Hun), 128 ; Matter of Gordon, 56 Supm. Ct. (49 Hun), 370. In this respect an assignment differs noticeably from a mort- 254 GENERAL ASSIGNMENTS. [CH. XIII. gage, which may be made to secure future as well as present responsibilities. Hendricks v. Robinson, 2 Johns. Ch. 283 ; affi'd, as Hendricks v. Wcdden, 17 Johns. 438 ; Haas v. Falk, 54 State E. 160 ; Swift v. Hart, 42 Supm. Ct. (35 Hun), 128. § 213. Contingent liabilities.— Liabilities actually existing, although contingent in their character and not yet matured, may be protected by an assignment. Instances of this are liabilities as indorser, surety, or bail. Keteltas v. Wilson, 36 Barb. 298 ; 8. c. 23 How. Pr. 69 ; Oriffin v. Marquardt, 21 N. Y. 121 ; Loeschigh v. Jacobsmi, 26 How. Pr. 526 ; s. c. 2 Robt. 645 ; Cunningham v. Freehorn, 11 Wend. 241 ; s. c. 1 Edw. 25C ; 8. 0. 3 Paige, 557 : Brainerd v. Dunning, 30 N. Y. 211 ; Wehb V. Thomas, 49 State E. 462. Whatever debt, says Mr. Justice Eobertson, in Read v. Worth- ingto7i (9 Bosw. 617, 628), can be secured by conveyance directly to the surety, may be secured by one to an assignee in trust ; nor is there any principle which puts a contingent liability beyond the reach of being protected. An assignment to protect a con- tingent liability no more hinders or delays a creditor than one to pay a debt not yet due, even if the assignees were not authorized to pay such debt before its maturity. Assignees have a right to retain sufficient in their hands to meet such liability, and dis- tribute the residue ; and after the liability is disposed of, dis- tribute what remains. Liabilities of the debtor upon which others are indorsers or sureties may be provided for. Bank of Silver Creek v. Talcott, 22 Barb. 550. And where the evidences of debt are in the hands of third parties, a direction to pay the debt, although the holder is not named, will amount to an appropriation of the property assigned to the payment of such debts. Griffin v. Marquardt, 21 N. Y. 121. §214. Provisions tending to delay. — Any provisions con- tained in the assignment, which shows that the debtor at the time of its execution intended to prevent the immediate apphcation of the assigned property to the payment of the debts, will avoid the assignment, because it shows that the assignment was made with the intent to hinder and delay creditors in the collection of their § 215.] PROVISIONS TENDING TO DELAY. 255 debts. Brigham v. Tillinghast, 13 N. Y. 215 ; Townsend v. Stearns, 32 JST. Y. 209. Numerous illustrations of this rule will be found in the suc- ceeding sections, where direction to the assignee as to the time, manner and terms of sale of the assigned property, and instruc- tions as to the disposition of the proceeds, have been held fatal to the assignment, because iiidicating a fraudulent intent to hin- der and delay creditors. D^Ivernois v. Leavitt (23 Barb. 63) is directly in point. In that case the assignments contained pro- visions allowing the assignee to withhold the distribution and division of the assets for any length of time, which he in his dis- cretion, might think proper. In declaring the assignments void for this reason, the court said (p. 80) : " This, if carried out, gives him a coercive power over the creditors, arming him with the means of constraining them to a commutation or release of their claims. It is, in a great measure, to prevent and ignore such a de- sign, that courts of justice have so generally, of late, evinced a disposition to avoid all instruments investing the assignee with any discretion beyond what is absolutely inseparable from the performance of his trust." See Storm y. Davenport, 1 Sandf. Ch. 135. § 215. Directions as to the time of sale.— Creditors are en- titled to have the assigned property converted into money and applied to the payment of their debts, without any unreasonable delay. Meachem v. Sternes, 9 Paige, 398, 406. And any pro- vision contained in an assignment, which shows that the debtor, at the time of its execution, intended to prevent such immediate application, will avoid the instrument, because it shows that it was made with " intent to hinder and delay creditors in the collec- tion of their debts." Brigham v. Tillinghast, 13 N. Y. 215, 220 ; s. c. 15 Barb. 618. Thus, in Woodhurn v. Mosher (9 Barb. 255), where the assignees were authorized to convert the prem- ises into money " within convenient time as to them shall seem meet," this clause was held to render the assignment void ; and in Murphy v. Bell (8 How. Pr. 468), where the same language was employed, it was held equally fatal. But these cases probably carried the rule of an adverse construction too far (see ante, § 198). In Benedict v. Huntington (32 N. Y. 219, 227), where 256 GENERAL ASSIGNMENTS. [cH. XIII. substantially the same language was held to be unobjectionable, and the later cases in the Court of Appeals, a rule of construc- tion more favorable to the validity of the instrument, appears to have been adopted. In Ogden v. Peters (21 N. Y. 23), where the provision was to convert the property " into cash as soon as the same may conveniently and properly be done," this language was considered harmless, as conferring no power or directioa out- side of the duty of the assignee to go on at once and convert the estate, and pay the debts. In Griffin v. Marquardt (21 N. Y. 121), where the direction was " to sell the property without delay for the best price that can be procured," it was held that a fair interpretation of this language was, that the assignee should pro- ceed to sell and convert the assigned property into money with- out unnecessary or unreasonable delay ; although it is declared that if the direction operated to vest any discretionary power in the assignee not legally incident to his trust, nor to be, on the application of creditors, at all times controlled by the court, it would be the duty of the court to pronounce the assignment fraudulent. In Jessup V. Hulse (21 N. Y. 168), the assignee was empow- ered " to sell, dispose of and convey the said real estate and per- sonal property, at such time or times, and in such manner, as shall be most conducive to the interests of the creditors of the said party of the first part, and convert the same into money, as soon as may be consistent with the interests of said creditors." This provision was held to be but a mere affirmance of the legal obliga- tions of the assignee, and therefore did not affect the validity of the instrument. In Townsend v. Stearns (32 X. Y. 209), the assignee was clothed with full power " to sell and dispose of the assigned premises, at such time or times, and in such manner, as to hira may seem to be most for the benefit and advantage of the cred- itors." It was held that tliis provision was free from all objec- tion. And see Wilson v. Robertson, 21 N. Y. 587 ; Bellows v. Patridge, 19 Barb. 176 ; Clapjj v. Utley, 16 How. Pr. 384. In Sutherland v. Bradner, 46 Supm. Ct. (39 Ilun), 134, the assignment covered real and personal property ; it contained no direction for the sale of the personal property and provided that after the payment of specified creditors the assignee should re- §§ 216, 217.] AUTHORITY TO SELL ON CREDIT. 257 turn the surplus of the assigned property to the assignors, the assignment was declared invalid. § 2i6. Provisions as to mode of sale. — The general princi- ples which are applicable to provisions in reference to the time of sale, apply equally to provisions in reference to the manner of sale. The assignment must contain no provision which con- flicts with the obligations conferred by law upon the assignee. He is bound to bring the property to sale in the manner most advantageous to creditors, and this may be either at public auction or at private sale. Hence, a provision in the assignment, which authorizes him to sell the property " at public or private sale, as he may deem most beneficial to the interest of the creditors," is not objectionable. Halstead v. Qordmi, 3i Barb. 422. But a restriction in the assignment requiring the assignees to sell at public sale, may render the assignment null and void, especially where, taken in connection with other circumstances, it shows that the object of the whole transaction was to coerce or persuade the creditors into a settlement. Worh v. Ellis, 50 Barb. 512. And, doubtless, if by the terms of the assignment itself the assignee was directed to delay the sale of the property, so as to dispose of it at retail, that would be a fraud upon cred- itors. Hart v. Crane, 7 Paige, 37. § 217. Authority to sell on credit. — It has been frequently decided that an express power reserved in the assignment to the assignee, to sell on credit, will vitiate the assignment. Nichol- son V. Zeavitt, 6 N. Y. 510 ; s. c. 10 Id. 591 ; rev'g 4 Sandf. 252 ; Burdioh v. Post, 6 IST. Y. 522 ; afB'g 12 Barb. 168 ; Barney v. Griffin, 2 IST. Y. 365 ; Porter v. Williams, 9 IsT. Y. 142 ; Ra.palee v. Stewa/rt, 27 N. Y. 310 ; Wilson v. Robertson, 21 N. Y. 587 ; Gates v. Andrews, 37 N. Y. 657 ; Houghton v. Westervelt, Seld. Notes, 34 ; Morrison v. Brand, 5 Daly, 40 ; jyivernois v. Leavitt, 23 Barb. 63 ; Whitney v. Krovjs, 11 Barb. 198. A contrary opinion was expressed by the chancellor, in Rogers v. De Forest (7 Paige, 272) ; but the authority of that case must be regarded as overruled by the cases cited above. The ground of this rule is well expressed by Mr. Justice Bron- 1? 258 GENERAL ASSIGNMENTS. [CH. Xni. son, in Barney v. Griffin, 2 N. Y. 365, 371. "An insolvent debtor cannot, under color of providing for creditors, place his property beyond tlieir reach, in the hands of trustees of his own selection, and take away the right of the creditors to have the property converted into money for their benefit without delay. They have the right to determine for themselves whether the property shall be sold on credit ; and a conveyance which takes away that right and places it in the hands of the debtor, or in trustees of his own selection, comes within the very words of the statute ; it is a conveyance to hinder and delay creditors, and cannot stand." An assignment which withholds from the assignee any discre- tion to sell the trust property on credit, and requires it to be sold only for cash, is not void for that reason. Carpenter v. Underwood, 19 N. Y. 520 ; Orant v. Chapman, 38 2^. Y. 293 ; Stem V. Fisher, 32 Barb. 198 ; Van Eossuvi v. Walher, 11 Barb. 237. In the case last cited it is said (p. 240, per Edwards, J.) : " It may be that such a provision is an unwise one, and one that ought not to be countenanced, and when there are any eircumstaacea which go to show that a forced sale was intended, to the injury of the creditors, it ought to be taken into consideration as an im- portant item of evidence, which, in connection with the other circumstances, would justify this court in setting aside the assign- ment. But, it seems to me, that this is all the effect which should be given to such a provision." WJiere it can be fairly inferred from the language of the as- signment, that it was the intention of the assignor to confer upon the assignee a power to sell on credit, it will be equally fatal to the assignment. The construction of the language employed in assignments has given rise to much discussion as to when an authority to sell on credit will be inferred. In Meacham v. Slernes (9 Paige, 398), where an assignment directed the trustee to sell the trust property at such reasonable times as shall seem proper to him, it was held that he was not authorized to sell the property at retail and on credit, nor to send it to agents to be sold on commission. In Whitney v. Krows (11 Barb. 198), where, by the terms of the assignment, the assignees were authorized " to sell and dis- § 217. J AUTHORITY TO SELL ON CREDIT. 259 pose of the property, upon such terms and conditions as in their judgment may appear best, and most for the interest of the par- ties concerned, and convert the same into money," it was held that the discretion conferred upon the assignees was a discretion to sell upon lawful terms, and since a sale on credit is unlawful, it was not to be inferred that such authority was intended. It is said that a fair construction of the whole provision is that the trustees are to exercise their judgment as to the manner of sale, but when they sell they are to receive the money. They are to convert the property into money not into debts. But in Moir v. Brown (14 Barb. 39, 51), where the same lan- guage was used in the assignment, Mr. Justice Hand said : "This language certainly gives a broad discretionary power; sufficient, in an ordinary power of attorney, to sustain a sale on credit." The assignment, however, was declared void upon other grounds. In Schufeld.t v. Abernethy (2 Duer, 533), where the authoi'ity to the assignee was to sell the assigned property on such terms and conditions as, in his judgment, might be deemed best, it was held, on the authority of Nicholson v. Leavitt (6 IS". Y. 510 ; rev'g 4 Sandf. 252), that the assignment was fraudulent and void on its face, because conferring upon the assignee a discretionary power to sell on credit. To the same effect is Lyon v. Plainer, 11 N. Y. Leg. Obs. 87. In Nicholson v. Leavitt, however, there was an express authority to sell on credit. The language of the assignment was to sell " for cash or on credit, or partly for cash and partly upon credit." This difference in the language was noticed, but the court were of opinion that the discretion conferred upon the assignees was one which, by a necessary implication, conveyed the power to sell on credit. In Kellogg v. Slawson (15 Barb. 66), in the Supreme Court, substantially the same language was held to be unobjectionable. It was held that the words employed could be fully satisfied sjiort of conferring a power to sell on credit. And this opinion was sustained on appeal to the Court of Appeals (11 N. Y. 302). And to the same effect are Southworth v. Sheldon, 1 flow. Pr. 414 ; Gla/rJc v. Fuller, 21 Barb. 128 ; Nichols v. McEwen, 21 Barb. 65 ; affi'd, 17 N. Y. 22 ; Wilson v. Robertson, 21 JST. Y. 260 GENERAL ASSIGNMENTS. [OH. xni. 587 ; Benedict v. Ntintington, 32 N. Y. 219 ; 8. c. 19 How. Pr. 350 ; Townsend v. Stearns, 32 Id. 209. In Brigham v. TiUinghaat (15 Barb. 618), where the assignee was directed to convert " all and singular the premises and estate aforesaid into money or available means,^'' the court at general term were of opinion that the words " available means" signified means suitable for the purpose described, to wit, the payment of debts, and therefore were unobjectionable. But on appeal to the Court of Appeals (13 N". Y. 215), the judgment of the Su- preme Court was reversed on the ground that the clause referred to necessarily conferred a power upon the assignee to convert the assigned property into securities which were not money. And in Bellows v. Patridge (19 Barb. 176), where the trust was to convert the assigned property into money by sale, either public or private, as soon as reasonably practicable with due re- gard to the rightful interests of the parties concerned, this was held not to authorize a sale on credit. This case, however, turned principally upon the supposed authority to delay the sale of the property, and falls among the class of cases to which we have previously referred. See ante, § 215. And where the direction to the assignee was to sell the prop- erty " to the best possible advantage," this was held not to authorize a sale on credit. Judson v. Aheel, 5 W'kly Dig. 221. The principle which courts have adopted in construing the language of assignments in the particular as to which we are now inquiring, is well illustrated by the case of Rapalee v. Stewart, 27 N. Y. 310. There the language was "to be converted into cash or otherwise disposed of to the best advantage." These words clearly conferred a discretion to dispose of the property other- wise than for cash. They conferred not merely a discretion to act inside the rules of law, but a discretion to exceed the limits which the law allows in the execution of such trusts. They were consequently declared fatal to the validity of the assignment. See 21ulUr v. Norton, 132 U. S. 501. § 2i8. Power to declare future preferences. — An assign- ment which reserves to the assignor the right to give future pref- erences, is fraudulent and void. The same is the case if the assignee be empowered to gi ve future preferences. Boa/rdman v. .§218.] FUTURE PREFERENCES. 261 Halliday, 10 Paige, 223 ; Barnum y. Hempstead, V Id. 568 ; Averill v. Louck^, 6 Barb. 470 ; Sheldon v. Dodge, i Den. 217 -, Strong v. Skinner, i Barb. 546 ; Kerdieis v. Schloss, 49 How. Pr. 284 ; WaJceman v. Grover, 4 Paige, 23 ; s. c. sub. iiom. Graver v. Wakcm,am,, 11 "Wend. 187, 203. " The reason," says Mr. Justice Van Vorst, in Kercheis v. Schloss {supra), " why the reservation of such power in the as- signors is fraudulent, is obvious. The debtor, in such an assign- ment, puts his property beyond the reach of his creditors, and yet reserves the right to control the manner of its distribution among them, which control would enable him to exact from them such terms as he might choose to offer." And somewhat similar language is employed by Chancellor Walworth, in Boardma/n v. . Halliday {supra). He says : " One very serious objection to such au assignment is, that none of the creditors among whom such preferences are to be given, can ever know what their i-ights are under the assignment, where the fund is insufficient to pay allthe debts ; so as to render it safe for them to attempt to assert those rights in any suit or proceeding, either at law or in equity. For if any one of such creditors should institute a suit to compel the assignees to account, and pay over the trust fund as directed by the assignment, such assignees would unquestionably exercise the discretion of preferring other creditors to him. . . . The effect of the assignment, therefore, is to place the creditors directly within the power of the assignees, and to compel them to acquiesce in such terms as the assignees may think proper to prescribe, as the only condition upon which they can get any part of the proceeds of the property of their debtor." In Bagley v. Bowe, 50 N. Y. Super. 100, it appeared that after the declarations of trusts the assignment contained a clause empow- ering the assignee to execute and acknowledge — for such consider- ation, in money or other thing, as he may deem sufficient — all such deeds, etc., as in his discretion may, from time to time, be necessary to carry into effect the intent and purpose of this in- strument, it was held that this clause, taken in connection with the other provisions of the assignment, did not confer on the assignee the power to sell the assigned property on credit. This construction was sustained by the Court of Appeals {Bagley v. Bowe, 105 ]Sr. Y. 171), although the judgment was reversed on another ground. 262 GENERAL ASSIGNMENTS. [CH. XHI. § 219. Power to compound with creditors. — A provision in an assignment which gives an assignee full power and liberty to compound with all or any of the creditors in such manner and upon such terms as they shall deem proper, but so as not to inter- fere with or depart from the order of preference established in the assignment, does, in effect, perpetuate the right of giving preferences by vesting in the assignee an arbitrary power of com- pounding with any one of the creditors upon such terms as they may think proper. Such a provision, therefore, cannot be sus- tained. Wakeman v. Grover, 4- Paige, 23 ; s. 0. sub. nom. Gro- ■ver V. WaJeeman, 11 Wend. 187, 203. In Van Nest v. Yoe (1 Sandf. Ch. 4, 5), where it was provided in the assignment as follows, " nothing, however, hereinbefore contained, shall be considered as restricting or preventing" the assignee " from liquidating or compounding with any of the creditors by making, assigning over, or transferring, any of the choses in action, debts or accounts due to the assignors," the court refused to infer a fraudulent intent from this clause. Where the assignment contained a clause to the effect that the assignee should have the right to compromise with the creditors of the assignor if, in the opinion of the assignee, it would be ad- vantageous to the assignor and his creditors, this was held to in- validate t-lie assignment. McOonnell v. Sherwood, 84 N. Y.522 ; affi'g 26 Supm. Ct. (19 Hun), 519. Danforth, J., in deliver- ing the opinion of the court, said (p. 529) : " If the assignment is valid, the trust to compromise is to be observed and regarded by the courts, and delay for that purpose in the disposition of the property or the distribution of the avails could be justified by the assignee, although required by a creditor to hasten the con- version of assets or pay over its avails. So too, in negotiating for or arranging a compromise, the interest of the debtor is to be regarded and kept in view by the assignee, for it is permitted only when in his opinion such proceeding would be advantageous to the assignor. It therefore cannot be said that the assignor has devoted his property absolutely and unconditionally to the payment of his debts." § 220. Power to compound debts due the assignor.— When the authority is to compound claims due to the assignor, § 221. J POWER TO COMPOUND DEBTS. 263 there is no necessary implication of fraudulent intent. So where the assignee in the collection of the debts was authorized, in the exercise of a sound discretion, to compromise such as were doubt- ful by receiving a part of the money due, this clause was held to be unobjectionable. Bow v. Plainer, 16 N". Y. 562. And where the assignees were authorized " to compromise all bad and doubtful claims," it was held that this clause was not of itself evidence of a fraudulent intent. Brigham v. TiUinghast, 15 Barb. 618. And a similar conclusion was reached where the direction to the assignee was to compound, compromise and set- tle the claims assigned, in his discretion. Bellows v. Batridge, 19 Barb. 176. Some doubt as to the validity of such provisions was suggested in the case of Murphy v. Bell, 8 How. Pr. 468. But that doubt has been set at rest by Bagley v. Bowe, 105 N. Y. 171, where it was held that a provision in an assignment authoriz- ing the assignee to compound or compromise dues owing to the assignor, does not invalidate an assignment. In Coyne v. Weaver (84 N. Y. 386), where the assignment con- tained a clause authorizing the assignee to compound for the choses in action assigned, " taking a part for the whole when he shall deem it expedient," the court, in construing this clanse, said (p. 391) : " The clause in question, therefore, must be held to have given to the assignee no arbitrary power to compromise where such action was neither necessary nor proper ; but merely the discretion which the law recognizes, to compromise doubtful and dangerous debts, in cases where the safety and interest of the fund demands such action ; and that in such case only can he honestly ' deem ' a compromise ' expedient ' or be allowed to plead that authority as a protection." So a similar clause was held not to invalidate an assignment, in MoGonnell v. Sherwood, 84 N. Y. 522 ; Oiniher v. Richmond, 25 Supm. Ot. (18 Hun), 232. Such provisions are unnecessary. The assignee may be author- ized under the provisions of the act of 1877, in a proper case, to compromise or compound any claim or debt belonging to the estate, upon application to the county court. Laws of 1877, c. 466, § 23. See post. Chap. XXIII. § 221. Power to pay taxes, insurance and rent. — When 264 GENERAL ASSIGNMENTS. [CH. xni. part of the property assigned as real estate, the assignment is not rendered void by a direction to pay rents, taxes and assessments, which may become duo before the lands can be sold, as this may be presumed to have been intended for the benefit of creditors, where an immediate sale is contemplated, and there is no proof of fraud. Morrison v. Atioell, 9 Bosw. 503. A direction in an assignment, that the assignee should pay the rents and taxes on the real estate until sold, is a necessary power to preserve the property, and the assignee would have been authorized to do it, if the authority had not been included in the instrument itself. Van Dine v. Willett, 38 Barb. 319 ; s. o. 24 How. Pr. 206. An assignment will not be rendered invalid because it contains a provision authorizing the assignees to effect an insurance upon a portion of the assigned property, and to keep good an insur- ance already existing upon another portion of the property, so long as in their judgment it shall be necessary. Whitney v. ITrows, II Barb. 198. And in the same case, it was held that an assignment was not vitiated by a provision autliorizing the assignees, if they shall deem it necessary, to pay the interest on a mortgage which is a prior lien upon the assigned property, and the principal and interest on another mortgage, if they shall deem it for the interest of the creditors to do so. And where an assignment by copartners authorized the as- signee to pay the rents, taxes and assessments on the separate property of the individual copartners, it was held that this would not confer an authority to make the payments out of the partner- ship funds. Uyre v. JBeehe, 28 How. Pr. 333. § 222. Power to employ agents, attorneys, etc. — A general assignment is not rendered fraudulent and void on its face by a provision authorizing the assignee " to employ suitable agents at a reasonable compensation, to be paid out of the effects assigned, and generally to adopt such measures in relation to the settlement of the estate as will, in his judgment, promote the true interest thereof." The discretion conferred by such a provision will not be construed to mean a discretion unlimited by the rules of law, but one to be kept within the legal limits. Mann v. Witheck, 17 Barb. 388 ; Jacobs v. Remsen, 36 N. T. 668 ; Casey v. § 223. J EXEMPTION OF ASSIGNEE FEOM LIABILITY. 265 Janes, 37 IlT. Y. 608 ; Van Bine v. Willett, 38 Barb. 319 ; s. c. 24 How. Pr. 206. So an authoriby to employ an attorney. Van Dine v. Willett, supra ; Jacobs v. Remsen, supra. But a provision authorizing the payment of " a reasonable counsel fee" to the assignee, a lawyer, in addition to the expenses and commissions for executing the trust, is illegal, and renders the assignment void. Nichols v. McEwen, 17 N. Y. 22 ; aSi'g 21 Barb. 65 ; see Hill v. Agnew, 12 Fed. R. 230. § 223. Provisions exempting assignee from liability.— " Every provision in an assignment, which exempts the assignee from any liability that he would by law be subjected to as as- signee, is of itself a badge of fraud." Sandford, J., in Litch- field V. White, 3 Sandf. 545, 553 ; affi'd, 7 JST. Y. 438. Thus, an assignment containing a clause that the assignee shall not be liable or accountable for any loss that might be sustained by the trust property or the proceeds thereof, unless the same should happen by reason of the gross negligence or willful mis- feasance of the assignee, is void. IMch field v. White, 7 N. Y. 438; afB'g3Sandf.'545. Where it is provided in an assignment that the assignee shall not be accountable, except for gross neglect and willful mis- feasance, and only for property that may come to his hands and under his control, the legal inference is that the assignment is made with a fraudulent intent. Olmstead v. Herriclc, 1 E. D. Smith, 310. And see Metcalf v. Van Brunt (37 Barb. 621), where a similar provision was presumed to avoid the instrument. The ground of this rule is stated by Mr. Justice Daly, in Olm- stead v. HerricTc {supra), as follows : " When a man in failing circumstances assigns his property in trust for the payment of his debts, he is bound to select an assignee that will do all that the law requires of a trustee, in respect to the rights of those that have a beneJScial interest in the property assigned. When the debtor, therefore, absolves his assignee from the exercise of that care and diligence essential to the due administration of the trust — when he consents that he shall be released from all liabil- ity, except when he is guilty of willful misfeasance or gross neg- lect — that is, that he shall not be answerable for any losses that may be occasioned by his want of ordinary caution, his inex- 266 GENERAL ASSIGNMENTS. [CH. xni. cusable mistakes, or any act of negligence which is not gross in degree ; the debtor does that which he has no right to do. . . . It is urged, that as the condition is repugnant to the policy of the law, the assignee would, notwithstanding its existence, continue liable for the want of ordinary care and diligence. Upon this point, however, I think that creditors coming in under the as- signment, and claiming the benefit of its provisions, would be bound by the stipulation upon which the assignee accepted the trust." See Jewett v. Woodward, 1 Edw. 195, 197. Where the assignment contains a provision that the assignees should not be accountable for the defalcation of any clerk em- ployed by the assignors, it will be void. Yan Nest v. Yoe, 1 Sandf. Ch. 4. In Jacobs v. Allen (18 Barb. 549), where the assignment pro- vided that the trustees should not be answerable for the acts, neglects or defaults of any attorney or agent that they might appoint, nor for any misfortune, loss or damage which might happen without their willful default — but this provision was fol- lowed by an express covenant, on the part of the assignees, to accept the trust and to act faithfully and justly in the execution of the same — it was held that these clauses construed together did not render the assignment fraudulent upon its face. In Casey v. Janes (37 N. Y. 608), it is said that it is usual to insert in an assignment, more for the protection of the assignee against liability for demands against insolvent and irresponsible jarties than for any other purpose, a clause exonerating the assignee from liability to account for debts which he is unable to collect, and such a clause does not vitiate the assignment. § 224. Power to defend suits and to pay costs.— An assign- ment by an insolvent debtor, which provides for the payment of all costs and expenses necessarily incurred by the assignor, in de- fending any suits that might be instituted against him by any creditor or other person, for anything growing out of the assign- ment, or in any way connected with it, is fraudulent as against creditors. Mead v. Phillips, 1 Sandf. Ch. 83. It is a fraud upon the creditors to authorize the assignee to employ the proceeds of the assigned property in defending suits which may be brought against the assignor by his creditors, to § 225.] POWER TO LEASE OR MORTGAGE. 267 recover their several debts. Planck v. Sohermerhorn, 3 Barb. Ch. 644 ; Levy's Accounting, 1 Abb. JST. C. 177, 181. But au authority to the assignee " to commence, continue, maintain and prosecute to effect, and also to defend all actions at law and equity, and other proceedings which they may deem necessary to the execution of the said trust," confers upon the assignee a discretionary power to defend suits, which they would exercise at their peril as between themselves and the creditors interested. Van Nest v. Toe, 1 Sandf. Ch. 4. § 225. Power to lease or mortgage. — A power to lease or mortgage the assigned estate, is void. Planch v. Schermerhorn, 3 Barb. Ch. 644 ; Darling v. Rogers, 22 Wend. 483 ; s. c. as Rogers v. De Forest, 7 Paige, 272. The only trust which can be created in real property, for creditors, is a trust to sell ; 1 R. S. 728 (4 R. S., 8th ed., 2437), § 55. But an attempt to create a void trust, to lease or mortgage, does not invalidate the whole instrument, the legal trust only is effectual. Darling v. Rogers, 22 Wend. 483 ; Van Nest v. Toe, 1 Sandf. Ch. 4. CHAPTER XIV. FRAUD FROM EXTRINSIC CIRCUMSTANCES. § 226. In general. — In the previous chapter attention has been called to those provisions appearing upon the face of the assignment, which have been brought into question before the courts as indicating a fraudulent intent on the part of the as- signor. The object of tlie present chapter is to consider those matters vs^hich, taljen in connection with the assignment, but not necessarily appearing upon its face, furnish evidence of a similar fraudulent intent. § 227. Fraudulent intent on the part of the assignor de- feats the assignment. — The statute of fraudulent conveyances renders an assignment made with intent to hinder, delay and de- fraud creditors void (2 E. S. 137, § 1 ; 2 Bjrdseye, p. 1236, § 19). While that provision does not impair the title of a pur- chaser for value without notice of the fraud {ibid. § 5), yet it is well settled in this State that a voluntary assignee in a general assignment is not a purchaser for value, and is therefore not within the protection of the provision last cited. It follows that if a general assignment is made by the assignor with the intent to hinder, delay or defraud creditors, it is invalid as against cred- itors, no matter how free from knowledge of or participation in the fraud the assignee may be. Loos v. Wilkinson, 110 N. Y. 195 ; Starin v. Kelly, SS N. Y. -llS ; Kingston v. Koch, 64 Supm. Ct. (57 Hun), 12 ; Cuyler v. McCartney, 40 N. Y. 221 ; ISchofield V. Scott, 20 State E. 815 ; Wilson v. Forsyth, 24 Barb. 105 ; liathhun v. Plainer, IS Barb. 272. The authorities in this State are uniform in support of the position that an assignee under a general assignment is not a purchaser for value within the meaning of the statute above referred to. Taleott v. Iless, 38 Supm. Ct. (31 Hun), 282, 284 ; Putnam v. Ruhhell, 42 N. Y. 106, 114 ; Wmerly Nat. Bh. v. Halsey, 57 Barb. 249, 263, § 227.] FRAUDULENT INTENT OF ASSIGNOR. 269 264 ; Cuyler v. McCartney, 40 N. T. 221, and upon this point see also Griffin v. Marquardt, 17 N. Y. 28 ; Work v. JilUs, 50 Barb. 512 ; Mead v. Phillips, 1 Sandf. Oh. 83 ; Sands v. Mildreth, 14 Johns. 493 ; Waterhury v. Sturtevant, 18 Wend. 363. In some States a different rule seems to prevail.' Bump on Fraud. Con v. 2d ed., pp. 353, 354. Where an assignment is made by copartners one of whom has been guilty of conduct which shows a fraudulent intent connected with the making of the assignment, this will render the assignment invalid, although the intent is not brought home to the other partner. Such is the character of the ownership of partnership property that a fraudulent intent on the part of one partner in its disposition must necessarily pervade the whole transaction. Partners hold as joint tenants ; each owns the whole as well as his share of the firm property ; each conveys the whole as well as his share. If the conveyance by one is made with fraudulent intent the whole conveyance is necessarily made with fraudulent intent. In Fourth Nat. Bank v. Burger, 15 State R. 101, it was contended that an assignment which contained a prefereuce for the payment of an individual debt of one partner was not invalid because of the ignorance of two of the assignors of the attempted illegal preference. The court did not pass directly upon the question, but remarked that " it may be very well claimed that if the assignment is executed by any one of the assignors, with a fraudulent purpose, and with intent to hinder and delay the creditors of the firm, it is abso- lutely void whether such intent and purpose is participated in by his copartners or not." And in Importers^ cfc Traders' Nat. Bk. V. Burger, 25 State E. 136, 3 Silv. (Supm. Ct.) 122, where the same assignment was before the court, this rule received further confirmation. In Illinois Watch Co. v. Payne, 33 State E. 967, and in Wilcox v. Payne, 28 State E. 712, it appeared from the statement of facts that one of the ' In some States the assignee stands as a bona fids purchaser. To invalidate the deed notice of the fraud must be brought home to him [Peters v. Bain, 133 U. 8. 670, 686 ; so in Virginia, Talley v. Ow-tain, 54 Fed. R. 43 ; so. in Ark. , Hunt V. Weiner, 39 Ark. 70 ; ManM v. Peay, 30 Ark. 335, 339 ; and in Su- preme Courf of LT. 8., Ma/rbury v. Brooks, 7 Wheat. 556, 577 ; Broohs v. Mar- bury, 11 Wheat. 78, 89 ; Tompkins v. Wheeler, 16 Pet. 106, 118 ; Emerson v. Senter, 118 U. 8. 3). 270 ge:n^eral assigxiients. [ch.xiv. partners had no participation in the frauds perpetrated. In Sohwab V. Kaughran, i2 State R. 407, one partner gave his wife a sum of mon6y out of the firm assets to pay his indi- vidual debt. This was held to avoid the assignment, although there was no evidence that the other partner knew of it. When the transaction by the individual partner is wholly outside of the firm business, the other partner or partners are not chargeable with a fraudulent intent arising therefrom ; as where one part- ner at or about the time of the execution of a firm assignment conveyed his individual property to his wife by voluntary con- veyance which was alleged to be fraudulent. Van Bergen v. Lehmaier, 79 Supm. Ct. (72 Hun), 304. In Warner v. Warren, 46 N. Y. 228, where a husband carried on business as agent of his wife, and the wife was ignorant of the frauds perpetrated by her husband in the business, " but was a passive instrument in the hands of her husband, by whom the frauds were perpetrated," it was held that an assign- ment executed by her as a part of the husband's fraudulent schemes was void. See White v. Benjamin, 3 Misc. 490, 496. As above stated, voluntary conveyances for creditors are dis- tinguished from conveyances to a vendee for value by the essential feature that the intent of the assignor is alone material. Honesty of purpose in the assignee is not the test. Wilson v. Forsyth, 24 Barb. 105. When the transferee is a purchaser for value without knowledge of the fraud his title is unimpeachable, however fraudulent may have been the intent of the grantor. EuM V. Phillips, 48 N. Y. 125 ; rev'g 2 Daly, 45 ; Jaeger v. Kelly, 52 N. Y. 274 ; Dudley v. Danforth, 61 N. Y. 626. But although the purchaser may acquire the property for value, yet if he was cognizant of and a party to the fraud, the convey- ance may be set aside at the suit of a judgment creditor. Bil- lings V. Russell, 101 N. Y. 226 ; Vietor v. Levy, 79 Supm. Ct. (72 Hun), 263 ; Durr v. Beck, 83 Supm. Ct. (76 Hun), 540 ; Uiggins v. Curtis, 44 State R. 194. The character of the no- tice which will charge a purchaser for value with knowledge of the fraud of his grantor is discussed in the opinion of Rapallo, J., in the leading case of Parker v. Conner, 93 N. Y. 118. See also Shauer v. Alterton, 151 U. S. 607. § 228. The fraud in the assignment must be at the time § 228.] FEAUDULENT INTENT OF ASSIGNOR. 271 of its making. — The assignment, like every other instrument, is good or bad at the time of its making. If it is valid in its creation, no subsequent fraudulent or illegal acts of the parties can invalidate it {Browning v. Hart, 6 Barb. 91) ; and if it is invalid then, no subsequent act can give it validity. Averill v, Loucks, 6 Barb. 470 ; Pittsfield Nat. Bank v. Tailer, 47 State K. 318 ; Schwab v. Kaugliran, 42 State R. 407. " You may, doubtless," says Mr. Justice Gould, mWilson v. Forsyth (24 Barb. 105, 121), " go outside of the mere naked writing, to show facts bearing on the question of fraudulent in- tent. But they are, then, nothing but evidence of what was the intent with which that writing was made. As, for instance, leaving the assignor in the possession and control of assigned personal property ; this (unexplained) tends to show that the transfer was intended but as a cover ; and is always proper evidence, on the question of fraudulent intent in making the assignment. Here it is not the subsequent act that renders void the instrument ; but the presumption, therefrom, of the prior in- tention ; an intention to give color of title to an assignee, to binder creditors from interfering with the property ; and yet leaving the control, real disposal and benefit, to the assignor." For the purpose of testing the motives and integrity of an in- solvent debtor in disposing of his property, it is, as a general rule, permissible to inquire into the details of his business transac- tions and the manner in which he has managed his property for such a length of time immediately preceding the assignment as will throw light on the question of his intent. First Nat. Bank v. Warner, 62 Supm. Ct. (55 Hun), 120. The acts immediately preceding and necessarily leading up to the assignment are in- separable from the execution of the assignment itself, and must he deemed a part of the general purpose. Davis v. Harring- ton, 62 Supm. Ct. (55 Hun), 109. In Shultz V. Hoagland (85 TS[. Y. 464, 467), it is said : " The evidence also must ascertain and establish the assignor's intent at the time of the execution of the instrument. As was said in Hard- mann v. Bowen (39 N. Y. 196, 200), ' If the assignment was valid in creation, having been honestly and properly executed and de- livered, no subsequent illegal acts, either of omission or commis- sion, can in any manner invalidate it.' But this rule must be 272 GENEEAL ASSIGNMENTS. [cH. XIV. taken as not intended to deny that such subsequent acts may re- flect light back upon the original intent, and help us to discern that correctly. ' ' " The intent to defraud is an emotion of the mind, and can usually be shown only by the acts and declarations of the party. These and all the concomitant circumstances must be established, and then the motive may be deduced from them in accordance with those principles which are shown by experience and ob- servation to rule human conduct." McAdam, J., White v. Benjamin, 3 Misc. 490, 505. It is upon this principle that the immediate conduct of the as- signees in taking or professing to take possession, their acts, when they find that the good faith of the assignment is ques- tioned, and all like circumstances are permitted to go to the jury as parts of the res gestm. Cuyler v. McCartney, 40 N. Y. 221. In Pine v. Rikert (21 Barb. 469), no inventory was made of the assigned goods, nor was there any list of creditors. The goods remained in the actual possession of the assignor. They were sold by him and his former clerks at private sale, and in the customary manner, by retail. His name was still upon the various signs of the store. Some of the goods were sold to pay an old debt not included in the first class. It did not appear that the assignee sold anything himself, nor did he give any reason for allowing the property to remain under the control of the assignor. It was held that these were most suspicious cir- cumstances, and tended strongly to ehow that the whole transac- tion was for the purpose of defrauding the creditors of the assignor. And in Shepherd v. Hibl (6 Lans. 387), fraudulent acts of the assignee in disposing of the assigned property were received as evidence establishing fraud in the execution of the assignment. And see Waverly Nat. Bank v. Ilalsey, 57 Barb. 249. When, at the time of the execution of a general assignment, it was agreed between the assignor and assignees tiiat they should lease all the assigned property to the wife of the assignor, which agreement was carried into effect, the assignees never taking possession of the property, but leaving it with the assignor and his wife, it was held that the assignment was void, as tending to hinder, delay and defraud creditors. Dolson v. Kerr, 12 Supm. Ct. (5 Hun), 643. § 229. J INCIDENTAL DELAY. 273 So in Nicholson v. Leavitt (4 Sandf. 252, 273), it was assumed by Mr. Justice Duer, that if the assignment was executed upon the agreement and condition that the assignees were to employ the assignor, and pay him a salary out of the assigned property, this would have furnished evidence of fraud, as being a reserva- tion out of the assigned property in favor of the assignor, but an employment of the assignor by the assignees after the assign- ment, which was no part of the agreement upon which the as- signment was executed, would not necessarily furnish es'idence of a fraudulent intent in making the conveyance. Worth River Bank v. Schumann, 63 How. Pr. 476. I 229. Incidental delay. — Although conveyances made with the " intent to hinder, delay or defraud" creditors are void, yet the necessary eflfect of every general assignment, even where the cred- itors are to be Y)a,id pari passu, is to hinder and delay creditors in the collection of their debts. Nicholson v. Leavitt, 4 Sandf. 252, 284. If mere hindrance and delay, therefore, avoided an in- strument of this nature, then, of course, in no case whatever could it be upheld. As the law recognizes and upholds such a disposition of a debtor's property when it is in other respects without taint, it is palpable that the mere effect of hindrance and delay cannot invalidate the conveyance. An assignment which has the effect to delay a creditor in the enforcement of his demand by the ordinary process of law, is not for that reason alone fraudulent and void. Harlan, J., Reed v. Mclntyre, 98 U. S. 507, 510 ; see also Mayer v. kell- man, 91 U. S. 496, 500. If the assignment be free from fraud it will not be avoided because it will incidentally and inevitably hin- der and delay creditors ; the necessary delay incident to the execu- tion of the trust is not within the meaning or condemnation of the statute of frauds declaring void conveyances made with in- tent to hinder, delay or defraud creditors. Hauselt v. Vilmar, 76 N. Y. 630 ; affi'g 43 Super. Ct. 574 and 2 Abb. N. C. 222. But the delay must be incidental and necessary to the existence of the trust or the exercise of the power. Nicholson v. Leavitt, 6 N. Y. 510, 515, Gardiner, J. ; and see remarks of Duer, J., in s. c, below, 4 Sandf. 252, 284 ; and Eyre v. Beebe, 28 How. Pr. 333, Gierke, J. ; Meux v. Howell, 4 East, 1 ; Wilder v. 18 274 GENEBAL ASSIGNMENTS. [cH. XIV. Winne, 6 Cow. 284 ; s. c. svi. nom. Wilder v. Fondey, 4 Wend. 100 ; Fickstock v. Zyster, 3 M. & S. 371 ; Jiex v. Watson, 3 Price, 6 ; Stewart v. English, 6 Iiid. 176. Such delay is common to all the creditors, and is no more the subject of just complaint than the delay unavoidably incident to the extinguishment of claims against the estate of deceased debtors. Porter, J., in Townsend v. Stearns, 32 N. Y. 209, 213. But when the delay, instead of being incidental, is the primary object to be accomplished by the creation of the trust, then the intent avoids the assignment. Nicholson v. Leavitt, 6 N. Y. 510, 517. And this will be the result even when the moral in- tention of the debtor is honest, as where he thinks that the prop- erty could be sold more advantageously for the interests of the creditors at a future time, and for this primary .purpose executes an assignment. Eyre v. Beehe, 28 How. Pr. 333. § 230. Intent to effect a settlement.— Whether tlje mere motive or expectation of the debtor in executing an assignment unaccompanied by an improper or suspicious act, and manifested by no objectionable clause in the assignment, will have the effect to vitiate the conveyance, may well be doubted. Whedbee v. Stewart, 40 Md. 414 ; Bump on Fraud. Convey. 2d. ed. 349 ; see Eyre v. Beebe, 28 How. Pr. 333. In Keteltas v. Wilson (36 Barb. 298), where the debtor made an assignment with preferences in favor of bail and sure- ties, although it was admitted that the assignor had the legal right to prefer such liabilities, yet since it appeared that the preferences were given to produce delay aud to enable the debtor to compromise with his creditors, it was held that the assignment was, for that reason, fraudulent and void. In Work V. Ellis (50 Barb. 512), where the assignor testified, in effect, that his intention in making the assignment was to accom- plish a settlement, and he was corroborated in his evidence by the assignee, this was regarded as conclusive evidence of an in- tent to hinder and delay creditors. But in Griffin v. Ma/rquardt (21 N. Y. 121), where the assignor testified that he made the assignment for the purpose of gaining time to pay his creditors, and this testimony was relied on as showing conclusively a fraudulent intent to hinder and delay creditors, the court held § 231. J SOLVENCY OF THE ABSIGNOB. 275 that there was no force in the suggestion. Mr. Justice Wright said that if the assignor had testified unqualifiedly that his " sole purpose in making the assignment was to gain time to pay his creditors, it would not have been testimony so conclusive in its nature as to have constrained the judge who tried the cause, re- gardless of all the other evidence in the case, to find against the hona fides of the assignment." The declaration was evidence to be weighed in determining the question of fraudulent intent. Judge Van Yorst, in the ease of North River Bank v. Schu- mann, 63 How. Pr. 476, 479, expressed his opinion upon this question in the following language : " The fact that a man may honestly believe that an adjustment of his afifairs may yet be reached which would prevent a further sacrifice of his property should not invalidate an aasigimient made by him for the benefit of his creditors, unless such belief in the end finds formal expres- sion in the language of the deed, or in a contemporaneous agree- ment between him and his assignee, which would hamper him in an expeditious closing of the trust according to its terms." Efforts by an assignor to bring about a compromise with his creditors after an assignment has been made furnish no evi- dence of fraudulent intent in making the assignment where the assignor has parted with control of his property and no elements of coercion are disclosed. Van Bergen v. Lehmaier, 79 Supm. Ct. (72 Hun), 304. § 231. Solvency of the assignor.— Although a debtor assign all or a portion of his property when he believes himself to be solvent, this will not invalidate the instrument. Ogden v. Peters, 21 N. Y. 23 ; s. c. 15 Barb. 560. An intent to hinder and delay creditors cannot be inferred from the solvency any more than from the insolvency of the debtor. The contrary doctrine, however, was maintained in Van Nest v. Yoe, 1 Sandf. Oh. 4 ; Planck V. Schermerhorn, 3 Barb. Ch. 644 ; see Oerman Ins. Bank v. Nunes, 80 Ky. 334, 335. In Rokenhaugh v. Hubbell (5 Law. Rep. N. S. 95 ; s. c. 15 Barb. 563, note), it was said that the true rule in such cases is, that a purpose to delay cred- itors would avoid an assignment when the sacrifice was sought to be prevented by the debtor himself, so as to enable him to real- ize something by way of a surplus or otherwise, but not where 276 GENERAL ASSIGNMENTS. [CH. XIV. the sole or primary intent was to enable all the creditors to real- ize their entire demands, and prevent loss or injury to any one. It was also held in that ease, that where a man has ample means to pay all his debts in cash, there can be no reason for making an assignment with preferences, except for the purpose of delay- ing creditors, and that such an assignment would be void. The case would be different, however, when a debtor has sufiBcient property to pay all his debts at its cash value, but is unable to pay in cash as his debts become due, and his property is in dan- ger of being sacrificed by some of his creditors. In Kennedy v. Wood, 59 Supm. Ct. (52 Huii), 46, the opinion was expressed that proof of tlie debtor's solvency known to him- self might be some evidence on the question of his intent in making an assignment. In the case of Livermore v. NortKru]p, 44 N. Y. 107, Com- missioner Leonard expressed the opinion that when the assets were clearly in excess of the liabilities of the debtor to a large extent, it might raise a presumption of an intent to hinder and delay creditors in the collection of their just demands, and amounts to a prima facie case of fraud ; but in that case it was held that the facts warranted no such conclusion. And see re- marks of Eoosevelt, J., in Ely v. Cook, 18 Barb. 612, 614 ; Johnson v. Rogers, 15 N. B. R. 1, 2. § 232. Intent to defeat execution. — The fact that an assign- ment is made with the intent to prevent the assignor's creditors from gaining a preference by execution, does not tend to estab- lish any fraudulent purpose. Holhird v. Anderson, 5 T. R. 235 ; lieed V. Molntyre, 98 C. S. 507 ; Welles v. March, 30 N. Y. 344 ; Eauselt v. Vilmar, 2 Abb. N. C. 222 ; Place v. Miller, 6 Abb. Pr. jST. S. 178 ; Wilder v. Winne, 6 Cow. 284 ; Jack- son V. Cornell, 1 Sandf. Ch. 348. Although the claims of some of the creditors may be ripe for execution, and the debtor have property out of which they might be collected, yet an as- signment by which they .will receive only a share, with other claims not overdue, works no legal fraud. Mercer, J., in Wilson V. Berg, 88 Pa. St. 167 ; s. 0. 1 Am. Insol. R. 169, 172. Nor will a threat to make an assignment, which is a threat to do a perfectly lawful act, furnish evidence of an intended fraudulent disposition § 233.J THREATS TO MAKE AN ASSIGNMENT, 277 of the property. Dickinson v. Benham, 12 Abb. Pr. 158 ;, s. c. 20 How. Pr. 343 ; Wilson v. Britton, 6 Abb. Pr. 97 ; rev'g s. c. ibid. 33. So a threat that the debtor will make a preferential assignment is not evidence of a fraudulent intent to assign prop- erty which furnishes ground for the issuing of an attachment. Evans v. Warner, 28 Supm. Ct. (21 Hun), 574 ; Kipling v. Corbin, 66 How. Pr. 12 ; Harwell v. Furniss, 67 How. Pr. 188 ; Gillott v. Redlich, 57 Supm. Ct. (50 Hun), 390 ; Davis v. Howard, 80 Supm. Ct. (73 Hun), 347. § 233. Threats to make an assignment and promises not to do so. — There are, however, cases which hold that an in- solvent debtor cannot hold over his creditors a threat that he will make a general assignment in such a way as to defeat the recov- ery of their debts for the purpose of coercing them into a com- promise of their claims, or for the purpose of deterring them from taking legal proceedings while he is placing his property beyond their reach, and that threats under such circumstances furnish evidence of a fraudulent intent in making a subsequent assignment. Oasherie v. Apple, 14 Abb. Pr. 64 ; Livermore v. Rhodes, 27 How. Pr. 506 ; Anthony v. Stype, 26 Supm. Ct. (19 Hun), 265 ; U. 8. Net. & T. Co. v. Alexander, 42 State R. 668 ; Ross v. Wigg, 41 Supra. Ct. (34 Hun), 192, 202 ; Clark v. Andrews, 40 State R. 399. In Gasherie v. Apple (14 Abb. Pr. 64, 68), it is said: " The law allows a debtor to assign his property to pay his debts, and even to make preferences, but compels him to make his selection without any conditions for personal gain to himself ; thus he can- not, by an assignment, hold out a hope of an extra share of his assets, or a fear of loss of any participation therein, as a means to induce a creditor to abandon all, or any part of his claim, or to forbear pursuing his legal remedies therefor." Cited with ap- proval in Anthony v. Stype, supra. A debtor may, by promises and inducements held out to a creditor to deter him from legal proceedings, estop himself from the right to execute a general assignment valid as against such creditor. Thus, where a judgment had been taken against a firm by default, and they obtained a stay of proceedings on the ground that they had a good defense, and their attorney assured 278 GENERAL ASSIGNMENTS. [CH. XIV. the plaintiffs that in the meantime the firm would make no as- signment, bat, pending the motion, they made an assignment giving preferences, thus preventing the plaintiffs from reahzing anything on their judgment, it was held that the assignment was void as against such judgment-creditors, as being made with intent to hinder and delay them. Jaques v. Greenwood, 12 Abb. Pr. 332. That case was distinguished by Sedgwick, J., in Hauselt v. Vilmar (2 Abb. IST. C. 222, 227), and it was there held that mere dilatory proceedings, although taken in view of an antici- pated assignment, will not defeat a subsequent assignment exe- cuted in good faith. In Clark v. Taylor, U Snpm. Ct. (37 Hun), 312, a debtor against whom a judgment was about to be entered, agreed with the creditor that if judgment was delayed he would pay the debt in installment, and also that " if he was pressed in any way, or if he was threatened, he would at once notify the plaintiff's attor- neys, so that they might enter judgment and issue an execution thereon ahead of any assignment or other creditor," at the same time making a false statement as to his financial standing. It appeared that an assignment had then been drafted. After making some payments on account, the debtor subsequently drew a general assignment without notice to the creditor of his intention to do so. On this state of fact the majority of the court were of opinion that the evidence sustained the finding of a fraudulent intent in making the assignment ; Hardin, P. J., being of opinion that the agreement conferred a trust upon the assets in the hands of the assignee, which the court would en- force ; and see Glarh v. Andrews, 46 State R. 399. In Hess v. Blaheslee, 2 State R. 309, where the debtor made certain statements to induce the creditor to abstain from issuing execution, and then executed an assignment with the intent to defeat the priority of an execution, the General Term sustained a finding upholding the assignment. § 234. Contemporaneous acts— Fraudulent scheme.— It appears, from what has been stated in a previous section, that contemporaneous acts of the assignor which are connected with the execution of the assignment may be resorted to for the pur- pose of showing the intent with which the assignment was made. § 234.J CONTEMPORA.WEO08 ACTS. 279 It is apparent that frauds prior to and independent of the assign- ment cannot effect it." They may constitute frauds upon the assignment, but they are not frauds in the assignment. Loos v. WiLhi.naon, 110 N. Y. 195, 210 ; Cutter v. Hume, 43 State R. 242 ; Viefor v. Nichols, 13 State R. 461. But where the acts are connected together and form one scheme for the purpose of the disposition of the property of the debtor, then all the acts are to be taken together and the intent governing the debtors in the doing of one act establishes an intent as to the whole, and where an assignment is the culmination of whole scheme fraud in the acts leading up to it will vitiate the assignment. Loos v. Wilkinson, 110 N. Y. 195 ; Rothschild v. Saloman, 59 Snpm. Ct. (53 Hun). 486 ; Smith v. Clarendon, 6 N. Y. Supp. 809 ; Warren v. Lake, 37 State R. 799 ; First Nat. Bank v. Warner, 62 Supm. Ct. (55 Hun), 120 ; Davis v. Harrington, 62 Supm. Ct. (55 Hun), 109 ; Hardt v. Schwah, 79 Supm. Ct. (72 Hun), 109 ; White v. Benjamin, 3 Misc. 490, 497 ; Taloott v. Hess, 38 Supm. Ct. (31 Hun), 282 ; s. c. on second appeal, 4 State R. 62 ; Haydook v. Coojpe, 53 N". Y. 68 ; Abegg v. Schwab, 31 State R. 139. Acts which are contemporaneous with and are parts of the as- signment may modify it without destroying it. Thus preferen- tial conveyances, mortgages, or confessed judgments which are given in contemplation of the assignment, and may be regarded as forming a part of the assignment, and as intended to prefer creditors in excess of the amount permitted by statute, do not render the assignment invalid. ATyegg v. Bishop, 142 N. Y. 286 ; Gent. Nat. Bank v. Seligman, 138 N. Y. 435, 441. The effect of the attempt to give preferences in this manner as part of the act of assignment is to enable the assignee to bring the property thus disposed of by preferential transfer apart from the assignment within its operation. Spelman v. Freedman, 130 ' A fraudulent disposition of property does not of itself impair a subsequent general assignment. The assignee may sue for its recovery, and if successful it will be for the benefit of the creditors precisely as if it had been included in the assignment. Bstea v. Ounter, 122 U. 8. 450. This statement is ap- plicable to this State, where the power to recover in such cases is given to the assignee by statute. A fraudulent disposition of property invalidates a sub- sequent assignment for the benefit of creditors only where the deed of assign- ment is part of a scheme to defraud creditors. Hill v. Woodberry, 49 Fed. K. 138. 280 GENERAL ASSIGNMENTS. [OH. XIV. N". Y. 421 ; Berger v. Vm^relmann, 127 N. Y. 281 ; Glapp v. Glark, 49 Fed. R. 123. But when the acts accompanying or contemporaneons with the assignment are such as to indicate a fraudulent intent on the part of the assignor the assignment may be defeated. See ante, § 179 et seq. Contemporaneous acts within the meaning of the rule need not have taken place at the same time, so long as the transactions are so connected and similar in their relations that the same moti^^e may reasonably be attributed to all. McAdam, J., in White V. Benjamin, 3 Misc. 490, 497, 506. In the case last cited, after the plaintiff had brought suit against the assignor, his wife sued him for a larger amount. A verdict was directed for the plaintiff upon the trial of his action with direction that, the excep- tion should be heard at general term when judgment was given for plaintiff. Immediately before the entry of the judgment in plaintiff's suit judgment was entered in the wife's action which had been permitted to lie inactive, and executions were issued on the debtor's property. Shortly thereafter the debtor exe- cuted a general assignment. During the progress of plaintiff's action several transfers of real property were made by the debtor to his wife which were not recorded until immediately before the execution of the assignment.' The debtor was insolvent dur- ing the whole period. These facts and others extending over a considerable period of time were regarded as forming parts of one scheme which included the general assignment ultimately executed. In Eardt v. Schwab, 79 Supm. Ct. (72 Hun), 109, and Abeggv. Schwab, 31 State R. 139, a surviving partner of Schwab & Co. con- fessed judgments under which executions were issued, and all the leviable property, consisting of a stock of goods, was taken there- under. Immediately thereafter he executed a general assignment. ' The withh.olding of deeds from record may be a badge of fraud. Talcott v. Levy, 47 (State R. 399 ; s. c. 39 Abb. N. C. 3 ; Wliite v. Benjamin, 3 Misc. 490, 495. But the fact that the grantor remains in possession of real property when the deed is delivered and recorded does not of itself show ,any intention to commit a fraud. Glute v. Newkirk, 46 N. Y. 684 ; Wallace v. Berdell, 97 N. T. 13 ; Bavii v. Howard, 80 Supm. Ct. (73' Hun), 347. See post, § 241. But see Bacon v. Ha/i-na, 63 Fed. R. 99, 103 ; Blennerhaasett v. Sherman, 105 U. S. 100 ; WesUn v. Wells, 104 U. S. 438. § 234.] CONTEMPORANEOtJS ACTS. 281 The goods were then sold by the sheri£E and bid in by the judg- ment creditors, who turned them over to the debtor's brother, who continued business at the same place under the name of Schwab & Bros., under the management of the debtors, upon an agree- ment to pay the judgment debtors as they realized upon the goods. It was found that the whole transaction was a device to place the stock of goods beyond the reach of creditors and under cover for the benefit of the debtors, and that the general assign- ment was part of the device and was consequently fraudulent. Other illustrations of the invalidity of an assignment tainted by fraud as shown by contemporaneous acts and circumstances will be found in the note.' ' Where the debtor sold all his property to his brother, a young man with- out family, experience or property resources, and who was employed as his clerk, upon a credit of one year ; and afterward executed a general assign- ment with preferences, it was held that the sale and assignment were to be" regarded as one transaction, and that the circumstances afEorded suflBcient evidence of a fraudulent intent to justify an injunction and receiver. I/iteli- Jield V. Pelton, 6 Barb. 187. But a sale upon credit of part of their property, by an insolvent firm, while it is a circumstance which may be considered with others, bearing upon the question of fraudulent intent in an assignment sub- sequently made, does not necessarily establish it. And when the evidence shows that the property was sold upon a usual credit, to a person of un- doubted responsibility, for all that it was reasonably worth, and that the debts preferred by the assignment were honestly owing, and nothing ap- peared but that there was other property of the insolvents not covered by the sale, the court will not overrule the finding of a referee, that the sale and assignment had not been made with intent to hinder, delay or defraud cred- itors. Boberts v. Shepard, 3 Daly, 110. Where certain creditors attacked a sale made by a flrrn indebted to them, on the ground that it was fraudulent and void, an assignment previously made by one of the firm to his son was admitted as evidence on the ground that it came within the rule la respect to evidence of contemporaneous frauds. An- grmie v. Stone, 45 Barb. 35 ; afS'g 25 How. Pr. 167. In Browning v. Hart (6 Barb. 91), where a sale by an insolvent on credit was followed shortly afterward by an assignment, the sale was declared void, but the assignment was sustained. Where a firm transferred its stock in trade and assets to a creditor, at a fair valuation, who agreed to dispose of the property and repay upon a fixed credit any surplus of the proceeds, after satisfying his claim, and subse- quently the firm niade a general assignment for the benefit of creditors, in- cluding four promissory notes given by the creditor who had previously received the goods, and the assignment preferred his claim, it was held that neither the original transfer nor the assignment were void against creditors 282 GENERAL ASSIGNMENTS. [CH. XIV. A general assignment may be made by a debtor merely as a device to prevent the unearthing of previous frauds by placing the right of action to recover back the property fraudulently conveyed beyond the reach of creditors and in the hands of a friendly assignee, thus interposing a title between his property and his creditor, to hinder, delay, and defraud the creditor, and when made with such a purpose the assignment is fraudulent as to creditors. Davis v. Harrington, 62 Supm. Ct. (55 Hun), 109. See Morris v. Morris, 78 Snpm. Ct. (71 Hun), 45. When fraudulent conveyances and transfers have been made by the assignors in contemplation of the assignment, the assignee may, under the authority derived from the Act of 1858 (Laws of 1858, c. 314 ; see post, Chap. XXI.), maintain actions to set aside and disaffirm the fraudulent act of the debtor and recover the property for the benefit of the creditors under the assignment, and where the assignment is not itself invalid by reason of its connection with such fraudulent acts or otherwise the right of of the firm, by their terms or the circumstances of their execution. LoescMgk v. Baldwin, 1 Robt. 377 ; affl'd, in 38 N. Y. 326 ; see also Lansing v. Woodwm-th, 1 Sandf. Ch. 43. Thus, when the assignors immediately before making the assignment bought merchandise which they did not intend to pay for, but which they sold on credit and assigned the debt owing for the price to the assignee ; and at the time of making the assignment retained a large amount of money from the assignee for their own use, and allowed money to be retained by clerks either for their own use or for the benefit of the assignor, these facts were held to furnish sufficient evidence of a fraudulent intent in making the assign- ment. Waverly Nat. Bank v. Halsey, 57 Barb. 249. Where the assignor, acting in concert with his son, who was one of the assignees, but without the knowledge of the other assignees, simultaneously with the making of the assignment, procured from certain of the creditors, to whom a preference was given under the assignment agreements in writing, to lend to his son, one of the assignees, a large portion of the money that they should respectively receive upon their debts under the assignment for the term of five years, such loan to be secured by tlie notes of the son indorsed by the assignor, and authorizing the assignee to pay to this son the sums so agreed to be loaned and take his receipt therefor, and the name of the son was used for the benefit of the assignor, and the agreement was in fact made be- tween these creditors and the assignor, to enable the latter to prosecute busi- ness in the name of the son for his own benefit, and to use the money in such business, it was held that the inference was properly drawn from these facts that the assignment was made by the assignor with intent to hinder, delay and defraud his creditors. Haydoek v. Ooope, 53 N. Y. 68. § 235.] FRAUDULENT EEPRESENTATIONS. 283 action is exclusively in the assignee. Spring v. Short, 90 N. T. 538 ; Grouse v. Frothingham, 97 N. Y. 105, 113 ; Loos v. Wil- kinson, 110 N. Y. 195. But where the assignment is itself fraudulent, judgment creditors may in one action seek to set it aside and also to set aside previous fraudulent conveyances. Zoos V. Wilkinson, 110 N".Y. 195 ; Chandler v. Powers, 9 State E.. 169 ; and see post, Chap. XXI. ; JEstes v. Gunter, 122 U. S. 450. § 235. Obtaining property in contemplation of assignment — Fraudulent representations. — A further illustration of fraud in the execution of an assignment arising from extraneous cir- cumstances may be found in the purchase of goods by the as- signor upon false representations in anticipation of the assign- ment. Thus, where a person in failing circumstances buys goods and shortly afterward makes an assignment giving preferences, in attacking the assignment as fraudulent false representations made at the time of the purchase of the goods as to the settle- ment of former debts, and also statements as to the buyer's ex- pectation of future ability to pay, are proper to submit to the jury on the question of fraud. Byrd v. Hall, 1 Abb. Dec. 285 ; s. 0. 2 Keyes, 646 ; Wilson v. Ferguson, 10 How. Pr. 175. See Miller v. Halsey, 4 Abb. Pr. N. S. 28. But the mere fact that goods were purchased and an assignment with preferences afterward made does not justify a conclusion of fraud. Achelis V. Kahnan, 60 How. Pr. 491. The decisions go no further than to hold that when there is evidence of a preconcerted scheme to obtain goods by false repre- sentations, and then to turn them over under an assignment so that the proceeds shall go to preferred creditors, the fraud in the purchase will color the subsequent assignment. An assign- ment will not necessarily be regarded as a fraudulent disposition of property simply because the assignor has previously obtained goods upon credit by false representations and has preferred cer- tain creditors in his assignment. Talcott v. Rosenthal, 29 Supm. Ct. (22 Hun), 573 ; Achelis v. Kalman, 60 How. Pr. 491 ; Tim V. Smith, 13 Abb. N. C. 31 ; Milliken v. Da/rt, 33 Supm. Ct. (26 Hun), 24 ; Pool v. Ellison, 63 Supm. Ct. (56 Hun), 108 ; Hyman v. Kapp, 6 N. Y. Supp. 31 ; Kible v. 284 GENERAL ASSIGNMENTS. [CH. XIV. Herman, 58 Siipm. Ct. (51 Hun), 438. Nor eau an attacliment be sustained on the ground that the debtor has fraudulently dis- posed of his property by proof of representations as to the amount of his property, which are shown to have been false. Fleitmann V. 8ioUe, 13 State R. 3!)9 ; Greef v. SioMe, 15 State R. 248 ; Kibhe v. Herman, 58 Supin. Ct. (51 Hun), 438 ; Johnson v. Buclel, 72 Supra. Ct. (65 Hun), 601, 605. The Court of Appeals held, in Xat. Park Banh v. Whitmore, 104 N. Y. 297, that where a few days before the assignment was made the defendants reported they were entirely solvent and could pay all their debts in full, and made a statement of their affairs showing a large surplus of assets over liabilities ; and soon after these representations claimed that they could not pay their debts in full, and that they were insolvent, and proposed to their creditors a compromise of iifty cents on the dollar, payable in nine, twelve, and fifteen months without security, and the evi- dence tended to show that they had been engaged in a prosper- ous business yielding them large profits, and they gave no satis- factory or intelligible explanation of their sudden alleged insol- vency, but threatened that unless their offer of compromise was accepted they would make an assignment preferring one creditor, and that then the rest of their creditors would get little or noth- ing ; these facts, taken in connection with the efforts of the defendants with the co-operation of their assignee after the assignment, apparently to coerce a compromise at twenty-live cents on the dollar, their offer "to fix it up" with a creditor afterward if he would assent to the compromise, their selection of a foreign assignee, the relations between him and them, and the secret promise of a future preference, justified the Supreme Court in refusing to vacate an attachment obtained upon the ground that the assignment was made with the intent to hinder, delay, and defraud creditors. So in Kennedy v. ^Yood, 59 Supm. Ct. (52 Hun), 46, it was held that statements made by the debtors as to their solvency a short time before execution of an assignment were competent evi- dence as to the bona fides of the assignment, not as evidence of inducement to credit, but as showing that the debtors believed themselves to be largely solvent, and that this fact was material on the question of intent. § 236.] WITHDRAWAL OF ASSETS. 285 Where a vendor, from whom goods have been obtained by fraud, instead of disaffirming the contract of sale, affirms it by bringing suit thereon and prosecuting it to judgment, nfeither he nor a receiver (who stands simply in the place of the judgment- creditor), appointed in supplementary proceedings instituted upon such judgment, can set up the fraud in the sale for the purpose of defeating an assignment of the property made by the vendee for the benefit of creditors, although the assignment was made in furtherance of the fraud, with full notice thereof on the part of the assignee. Kennedy v. Thorp, 51 N". Y. 174 ; rev'g 2 Daly, 258 ; Cohen v. Irion, 26 State E. 1, 5. A sudden and unexplained disappearance of assets, as evi- denced by the difference between statements made by the debt- ors and their condition as shown by the schedule, furnishes evi- dence of fraudulent intent in making a general assignment. Buhl V. Ball, 48 Supm. Ct. (41 Hun), 61 ; see Globe Woolen Co. V. Carhart, 67 How. Pr. 403 ; Vietor v. Henlein, 41 Supm. Ct. (34 Hun), 562 ; Skinner v. Oettinger, 14 Abb. Pr. 109 ; Claflin V. Hirsch, 19 Wkly. Dig. 248. §236. Withdrawal of assets. — The intentional withholding of assets from the assignee has repeatedly been held to be a fraud upon the rights of creditors sufficient to render the assignment void, Shultz V. Hoagland, 85 N. Y. 464 ; Coursey v. Mor- ton, 132 N. Y. 556 ; Boyt v. Godfrey, 88 IST. Y. 669 ; Smith v. Ferine, 121 N. Y. 376 ; Faxon v. Mason, 83 Supm. Ct. (76 Hun), 408 ; Davis v. Harrington, 62 Supm. Ct. (55 Hun), 109 ; Schwab v. Kaughran, 42 State E. 407 ; Illinois Watch Co. V. Payne, 33 State E. 967 ; Wilcox v. Payne, 28 State E. 712 ; Passavant v. Cantor, 43 State E. 247 ; Chambers v. Sm.ith, 67 Supm. Ct. (60 Hun), 248 : Rothschild v. Salomon, 59 Supm. Ct. (52 Hun), 486 ; White v. Benjamin, 3 Misc. 490 ; Baglcy v. Bowe, $0 Super. Ct. (18 J. & S.) 100 ; Talcott v. Hess, 38 Supm. Ct. (31 Hun), 282 ; s. c. 4 State E. 62 ; Crouse v. Ilessler, 17 Wkly. Dig. 519 ; Iselin v. Henlein, 2 How. Pr. N. S. 211 ; Tie- tor V. Henlein, 41 Supm. Ct. (34 Hun), 562 ; Untermeyer v. Hutter, 33 Supm. Ct. (26 Hun), 147. " The policy of the law in regard to general assignments is that the debtor shall devote all his property to the satisfaction of 286 GENERAL ASSIGNMENTS. [CH. XIV. his debts. The nature of the relation created by insolvencj re- quires that the transfer should be of this comprehensive char- acter. Creditors have an equitable claim on all the property of their debtor, and it is his duty as well as his right, to devrote the whole of it to the satisfaction of their demands." McAdam, J., White V. Benjamin, 3 Misc. 490, 497. In Rothachild v. Salomon, 59 Supni. Ct. (52 Hun), 486, it appeared that within two days before the making of the assign- ment a considerable sum of money was withdrawn from the firm funds and given to the wife of one of the assignors, and was charged to her on the books of the firm against a fictitious credit ; it was held that the abstraction of this money constituted a fraudulent element in the scheme of which the assignment was a part, and that the assignment was consequently invalid. In Course]) v. Morton, 132 N. Y. 556, the assignor on the day of the assignment drew $963.50 out of the bank and gave it to his wife. Judgment setting aside the assignment was affirmed, the court remarking (p. 558) : " The rule is that the intentional withliolding and secreting of assets of a substantial value from the possession of the assignee is a fraud upon the rights of cred- itors, and renders the assignment void." In Chambers v. Smith, 67 Supm. Ct. (60 Hun), 248, it appeared that on the day of the assignment the assignor, in contemplation of the assignment, gave his wife $200. This was regarded as sufficient evidence on which the assignment might be set aside. In Schwab v. Kaughran, 42 State R. 407, shortly before making an assignment one of the assignors gave his wife from the assets of the firm $3700 in pay- ment of a debt that he, and not the firm, owed. The court found that this was done through an honest mistake and in the belief that he had a right to apply the money to the payment to the dis- chaige of his indebtedness ; the court, however, held the assign- ment fraudulent. Again, where it appeared that the assignors intentionally with- held a considerable portion of their estate from the operation of the assignment, and appropriated it to their own use in contem- plation of and as part of the plan of the assignment, it was held that this fraud was inseparable from the assignment itself, and rendered it fraudulent as to creditors. Fselin v. Henlein, 2 How. Pr. N. S. 211. The same question was presented, and § 237.] OMISSIONS OF PKOPERTY FEOrM SCHEDULES. 287 the same principle applied in the case of an attachment issued on the ground of the fraudulent disposition of property under this same assignment. Vietor v. Henlein, 41 Supm. Ct. (34 Hun), 562. Even though the property so withdrawn is subsequently turned over to the assignee, that will not afEect the propriety of the original transaction. " Tlie intent that controls is the intent of the assignor at the time of making the assignment, and this in- tent is not overruled by showing that after the assignment, and on the demand of the assignee, the money that had been in law fraudulently transferred was returned to the assignee." Schwab v. Kaughran, 42 State R. 407 ; Coursey v. Morton, 132 N. Y. 586 ; Friedlurgher v. Jaberg, 20 Abb. N. C. 279. But the question whether the property was withdrawn with fraudulent intent or whether its omission from the assignment was unintentional or of such a character and amount as not to dis- close a wrongful purpose is one for the jury to determine as a question of fact. J^ay v. Gromt, 60 Supm. Ct. (53 Hun), 44 ; Smith V. Clarendon, 6 N. Y. Supp. 809 ; Lewis v. Bache, 28 State E.. 405 ; Shultz v. Hoaglamd, 85 N. Y. 464. See Smith v. Ferine, 121 N. Y. 376. Where, before making the assignment, the partners drew small sums for the purpose of paying private debts and to sup- port their families, held that such withdrawals did not necessarily prove that the assignment afterward made was fraudulent. Vie- tor V. Nichols, 13 State R. 461 ; Vietor v. Henlein, 41 Supm. Ct. (34 Hun), 562. So where the assignors had been in the habit of drawing a small sum of money each month for house- hold experlses, and each assignor withdrew $30 for this purpose as usual, but shortly before making an assignment, it was held that the assignment was not thereby rendered invalid. Servis v. JMwede, 33 State R. 773. § 237. Omissions of property from schedules. — The sched- ules which the assignment act requires the assignor to make and file when made and filed by the assignor may be treated as part of the assignment, and as having been in contemplation when the assignment was made, and hence as characterizing the pur- pose of the assignor in making the assignment. Shultz v. Hoag- 288 GENERAL ASSIGNMENTS. [CH. XIV. land, 85 N. Y. 464 ; Talcott v. Hess, 38 Supm. Ct. (31 Hun), 282 ; s. c. 4 State R. 62 ; Terry v. Butler, 43 Barb. 395 ; Pratt v. Stevens, 94 K". Y. 387. Hence when property is intentionally omitted from the schedule tiled by the assignor this will be in- dicative of a fraudulent intent in making the assignment. Pitts- field Nat. Bank v. Tailer, 67 Supm. Ct. (60 Hun), 130 ; De Gam,p V. Marshall, 2 Abb. Pr. JSf. S. 373 ; Talcott v. Bess, 38 Supm. Ct. (31 Hun), 282 ; s. c. on retrial, 4 State E. 62 ; but see £llis v. Myers, 28 State R. 120, and Miller v. Halsey, 4 Abb. Pr. N. S. 28, but the wrongful intent must e.xist. Blain v. Pool, 13 State R. 571. An omission from the schedule of property which has no value is no evidence of fraud. Shultz v. Hoagland, 85 If. Y. 464 ; Pittsfield Nat. Bank v. Tailer, 67 Supm. Ct. (60 Hun), 130. Where the assignors resided in New Jersey, and had personal property situated there, which they owned individually, and this property was not included in the schedule made after the mak- ing of a preferential assignment in New York, the court was of the opinion that if the property had been situated in New York the omission from the schedule would have been indicative of a fraudulent purpose in the assignment ; but inasmuch as under the New Jersey statute a transfer to an assignee under a prefer- ential assignment is absolutely void, so that the assignee could take no title to the property situated in New Jersey, its omission from the schedule was not a subject of criticism. Eastern Nat. Bank V. Hulshizer, 2 State R. 93. See Blain v. Pool, 13 State R. 571. When the schedule subsequently filed by the assignor contains fictitious debts the assignment itself may be regarded as provid- ing for the payment of such debts and as, therefore, fraudulent. Boherts v. Vietor, 130 N. Y. 585 ; Terry v. Butler, 43 Barb. 395 ; Talcott v. Hess, 38 Supm. Ct. (31 Hun), 282. But it may be shown that the amount of the indebtedness was mistakenly inserted in the inventory without any intent to defraud. Bob- erts V. Buckley, 87 Supm. Ct. (80 Hun), 58. When the schedules are prepared and filed by the assignee they are not in themselves evidence of the assignor's intent in § 238.] SUBSEQUENT ACTS OE THE ASSiaHOK. 289 making tlie assignment. Denton v. Merrill, 50 Supm. Ct. (43 Hun), 224 ; s. o. 5 State E. 387 ; and see post, § 257. § 238. Other subsequent acts of the assignor.— As has been already stated, all an assignor's acts connected with, or coincident in time with, his assignment, may generally be in- quired into, because the law allows the greatest latitude in search- ing for evidence of a fraud which, from the nature of tlie case, must be confined almost exclusively within the assignor's bosom. Gould, J., in Wilson v. Forsyth, 24 Barb. 105, 128. But sub- sequent acts of the assignor, unconnected with the assignment, are wholly immaterial. Shultz v. Jioagland, 85 N. Y. 464 ; Roberts v. Buckley, 87 Supm. Ct. (80 Hun), 58, 62. Thus, where the assignor on absconding, after executing the assign- ment, carried off a sum of money with him, the assignment was not for that reason void. Wilson v. Forsyth, supra ; see Atu. Ex. Bank v. Well, 15 How. Pr. 193. Where it appeared that the assignor continued in possession of the assigned property, and was employed by the assignee to sell the stock, and assist in making collections at the store where the business was formerly carried on, and the amounts so collected were paid over to the assignee ; that this continued about six months, when the whole remaining stock was sold at 25 per cent, on the cost price to a brother-in-law of the assignor, who had paid a large portion of the purchase money, and was fully re- sponsible for the balance, the sale having been made for the full value of the goods, it was held, that in an action to set aside the assignment for fraud, there was not sufficient evidence of fraud to warrant an injunction and receiver. Beamish v. Conant, 24 How. Pr. 94. So where the assignor, at the request of the assignee, promised in advance to render services which might be needed, and after the assignment did aid in disposing of the merchandise, this was not regarded as evincing a fraudulent intention. North River Bank v. Schumann, 63 How. Pr. 476. Where the assignors were allowed by the assignee to make use of assigned machinery to work up new stock, and they also gratuitously worked up the assigned stock and the property was sold at auction and bid in by a third person for the benefit of the 19 290 GENERAL ASSIGNMENTS. [CH. XIV. wife of one of the assignors, there being no evidence to show that the sale was not fairly conducted, it was held that the cir- cumstances furnished but slight if any evidence of fraud in the making of the assignment. Turney v. Yan Gelder, 75 Supm. Ct. (68 Hun), 481 ; s. c. 52 State R. 66i. Where the assignment was made to a clerk of the assignors, who sold a portion of the property and disposed of the remainder to the mother of one of the assignors, who was a preferred cred- itor, and she afterwards carried on the business under her son's name, adding the word " agent," it was held that though these facts were suspicious they were not such as would justify the General Term in reversing a finding in favor of the assignment in the court below. Eastern If at. Bank v. Hulshize7\ 2 State R. 93. Subsequent acts of the assignor, and the control which he ex- ercises over the assigned property, may prove of importance {Persse (& Brooks Paper ^forks v. WilLett., 1 Robt. 131), but only in so far as they may be legitimately referred back to the time of the execution of the assignment, and serve to establish the intent of the assignor at that time [ante, § 206). This distinction is an important one. The assignor does not lose all interest in the assigned property by the execution of the assignment. He still retains an equitable interest in what may remain after payment of the debts provided for, and in seeing to it that the property be made available for the payment of his debts. Billing's Case, 10 Abb. Pr. 258 ; s. c. 21 How. Pr. 4-18 ; Dickinson v. Benham, 12 Abb. Pr. 158 ; s. c. 20 How. Pr. 343. And this interest will give him a stand- ing in court to move to vacate an attachment previously granted against him. Dickinson v. BenJiam, supra. This interest of the assignor will justify him in all proper efforts to assist in mak- ing the property realize the utmost. " It cannot be justly said," says Mr. Justice Gierke, in Eyre v. Beebe (28 How. Pr. 333, 337), " that every kind of interference by an assignor with the property of the trust" indicates a fraudulent intent. " Every insolvent debtor has at least a moral interest in the advantageous disposition of the property, in order that it may go as far as possible in the payment of his debts and the satisfac- tion of his creditors, and, therefore, any suggestion offered by him which may be useful to the trustee, and beneficial to the § 239. J DELIVERY OF POSSESSION. 291 creditors, so far from showing that he intended by the assignment to defraud his creditors, indicates that he was actuated by good motives from the beginning, if we can at all ascertain a past in- tent by subsequent conduct." § 239. Delivery of possession. — The Eevised Statutes pro- vide that " every sale made by a vendor of goods and chattels in his possession or under his control, and every assignment of goods and chattels by way of mortgage or security, or upon any condition whatever, unless the same be accompanied by an im- mediate delivery and be followed by an actual and continued change of possession of the things sold, mortgaged or assigned, shall be presumed to be fraudulent and void as against the cred- itors of the vendor or the creditors of the person making such assignment or subsequent purchasers in good faith ; and shall be conclusive evidence of fraud, unless it shall be made to appear on the part of the persons claiming under sncii sale or assignment that the same was made in good faith, and without any intent to defraud such creditors or purchasers." 2 R. S. 136, § 5 ; 4R. S. 8th ed. 2591, § 5. Under the provisions of the statute, unless an assignment be accompanied by an immediate delivery of the assigned property, and be followed by an actual and continued change of possession, the courts are bound to presume it fraudulent and void as against creditors, and to regard it as conclusively so, unless satisfied that it was made in good faith, and without any intent to defraud. Connah v. Sedgwick, 1 Barb. 210 ; Ball v. Looviis, 29 JSI. T. 412 ; Van Buskirh v. Warren, 'it Keyes, 119 ; s. c. 4 Abb. Dec, 457 ; Terry v. Butler, 43 Barb. 395 ; Putzel v. Schnlhof, 59 Super. Ct. (27 J. & S.) 88 ; Russell v. Lasher, 4 Barb. 232 ; Griswold v. Sheldon, 4 N, Y. 581 ; Dewey v. Adams, 4 Edw. 21 ; Currie v. Hart, 2 Sandf. Ch. 353 ; Van Nest v. Yoe, 1 Sandf. Ch. 4 ; Hitchcock v. St. John, HofiEm. Ch. 511 ; Grain v. Mitchell, 1 Sandf. Ch. 251 ; Fiedler v. Day, 2 Sandf. 594 ; McConihe v. Derby, 69 Supm. Ct. (62 Hun), 90. There must be an actual and continued change of possession as well as a nominal and constructive change, or the transaction will be fraudulent as against creditors. Currie v. Hart, 2 Sandf. Ch. 353 ; MiUer v. Halsey, 4 Abb. Pr. N. S. 28 ; Randall v. 292 GENEBAL ASSIGNMEMTS. [cH. XIV. Parker, 3 Saudf. 69 ; Betz v. Conner, 7 Daly, 550 ; Waverly Nat. Banh v. Hatsey, 57 Barb. 249 ; McCarthy v. McDer- mott, 10 Daly, 450. If a debtor assigns his property to one of his creditors, and act- ing as the creditor's agent retains the possession and retails the goods without any visible change in the mode of doing business, receiving compensation for his services, this is not a change of possession within the statute. Butler v. Stoddard, 7 Pai. 163 ; aSi'd, 20 Wend. 507 ; Wilson v. Ferguson, 10 How. Pr. 175. So where a debtor assigned a stock of merchandise in trust for his creditors, and after a mere symbolical delivery the assignee permitted the assignor and his clerk to continue in possession of the goods, selling them as before the assignment, and apparently for the benefit of the assignor, it was held that these facts unex- plained were evidence that the assignment was made in fraud of creditors. Adams v. Davidson, 10 N. Y. 309 ; see also Pine v. Pihert, 21 Barb. 469. So when the assignor assigned a stock of goods, and the assignee took the key of the store containing the goods, which was closed for about a week thereafter, and then the assignor continued the business, making purchases and sales as before, without any indication of a change of ownership except the addition of the letters " Agt. " to his name on one of the signs, it was held that this did not constitute such a continued change of possession as is contemplated by the statute. Ein- stein V. Chapman, 42 Super. Ct. (10 J. & S.) 144. Immediate possession of the assigned property is taken by the assignee when directly after the execution of the assignment the property passes into his possession, and the assignor exer- cises no control over it save to assist in the sale of some of it. Pyder v. Duffy, 80 Supm. Ct. (73 Hun), 605 ; Turney v. Van Gtlder, 75 Supm. Ct. (68 Hun), 481 ; s. c. 52 State R. 664 ; s. c. on former appeal, 45 State R. 333. If the delivery by the assignor be sufiBcient it is not necessary that the property should be removed from the place of delivery. Hitchcock v. .St. John, Hoffm. Ch. 511. The change must be continuous, although a sale be accom- panied by immediate delivery and followed by an actual change of possession, yet if thereafter, however long may be the inter- val, it comes again into the possession of the vendor by the act § 239. J DELIVERY OF POSSESSION. 293 or with the knowledge of the vendee, with no intermediate change of title, the presumption of fraud arises. Tilson v. Ter- williger, 56 N. Y. 273. The circumstance that the assignee constitutes the assignor his agent, is not alone sufficient to show that the assignment was made with fraudulent intent, especially when it appears that the assignee was not familiar with the business, and that he had con- fidence in the assignor, who was familiar with it. Wilbur v. Fradenhurgh, 52 Barb. 474 ; North River Bank v. Schumann, 63 How. Pr. 476 ; see cases cited, ante, § 208. The fact that tlie assignee employs the same clerks that were previously em- ployed by the assignor is not evidence of fraud. Parker v. Jer- vis, 3 Abb. Dec. 449. Thus where, at the time of executing the assignment, the assignor delivered to the assignee the keys of the store for the purpose of giving him dominion over the property, and the former clerks were discharged by the assignor, and all again employed by the assignee to take charge of and remain with the goods of the assignee, and they did so take charge of the goods and hold them for the assignee and in their actual pos- session ; and the assignee at the same time took the books, the notes and accounts, from the store to his office, and the signs were taken down — this evidence was regarded as showing a fair case of delivery of the goods, and a continued change of pos- session under the assignment. Parker v. Jervis, supra. Although a continued possession of the assignor is presumptive evidence of fraud, and conclusive unless rebutted, yet it may be shown to be consistent with good faith and to have been free from fraud. Smith v. Acker, 23 Wend. 653 ; Ball v. Loomis, 29 W. Y. 412 ; Van Buskirk v. Wa^-ren, 4 Abb. Dec. 457 ; s. c. 2 Keyes, 119 ; Rail v. Tuttle, 8 Wend. 375. When the presumption of fraud arises from the continued pos- session by the vendor, the burden of proof is on the vendee to make it appear that the sale was made in good faith and without any intent to defraud creditors. Siedenbach v. Riley, 111 N. Y. 560, 568 ; Carr v. Johnson, 36 State R. 783 ; Wallace v. No- dine, 64 Supm. Ct. (57 Hun), 239 ; s. c. 32 State R. 657. But when this presumption has been met by evidence of good faith, it is not necessary that the party should go further and show that there was an excuse or reason for the want of change 294 GENERAL ASSIGNMENTS. [CH. XIV. of possession. Mitcliell v. West, 55 N. Y. 107. Although, generally, it is a badge of fraud if the assignor continue in pos- session of the whole, or even a part of the assigned property, yet where there is no inventory of the property assigned accompany- ing the assignment, the assignor's retaining some property that he might have assigned, or that being covered by the general terms of the assignment, he might have delivered under it, is not an act that will make the whole assignment void of course. WiU son V. Forsyth, 24 Barb. 105. Where an assignment was made in good faith, and the assignor continued in possession of the as- signed property at the request and for the benefit of his assignees, who had used reasonable diligence to get the possession, it was held, previous to the Revised Statutes, that the assignment was not fraudulent ; that the possession of the assignor, under the circumstances, was not material, and was consistent with the real intent of the assignment. Yredenbergh v. White, 1 Johns. Cas. 156. Where the goods are not in the possession or under the control of the assignor, as when they have been taken by a sheriff under a levy on execution, the transaction is not within the purview of the statute, and the assignee's title to the goods, subject to the levy, is not affected by a failure to take possession. Mumper v. Bushmore, 79 N. Y. 19. The property need not be taken into the manual possession of the assignee. If it comes under his actual custody and control, it will be enough, although the delivery be merely symbolical or constructive. Thus a delivery of the keys of the place where the goods are stored may be sufficient to pass a valid title to the property. BuUis v. Montgomery, 50 N". Y. 352 ; Woodworth v. Hodgson, 63 Supm. Ct. (56 Hun), 236. So, in an early case, where an assignment of household goods was made, and a silver cup was delivered to the assignee in token of delivery, and he proceeded to advertise the goods for sale, but left the bulk of them in the possession of the assignor, the assignment was held valid. Yredenhergh v. White, 1 Johns. Caa. 156. This decision was made previous to the Eevised Statutes (2 R. S. 136), and the rule of law is now more stringent. In HitchGOck v. St. John (Hoffm. Ch. 511), it was said that a symbolical delivery of a small portion of the property will not be sufficient. And in § 240.] CHANGE OF POSSESSION. 295 Mead v. Phillips (1 Sandf. Ch. 83, 89), Vice-chancellor Sandford said : " I need .not determine whether the omission to deliver a small portion of the assigned property (in this instance it was about one third) would be a badge of fraud, when the assignee is shown to have taken the immediate possession of the residue, and to have continued in the possession thereof ; the as- signment being shown to have been made in good faith in all other respects. The want of an immediate and continued change of the possession of a material or substantive portion of the as- signed property, renders it imperative for the party supporting the validity of the transaction to prove that it was executed in good faith, and without any intent to defraud." But a failure to comply with the statute in reference to a de- livery and change of possession of the assigned property is an objection which can be taken only by creditors or purchasers in good faith. The fact that assignees, immediately after the ac- ceptance of the assignment, refused to take possession of the en- tire property, does not deprive them of their rights, nor relieve them of their obligations under it. Sheldon v. Stryker, ASi Barb. 284 ; s. 0. 27 How. Pr. 387. § 240. Change of possession — Real property. — Real estate is not included in the express language of the statute. The con- tinuance in possession of a grantor of real estate, after the con- veyance, while it may be a circumstance proper to be considered, in connection with other evidence, tending to show a design to defraud creditors, does not of itself warrant a finding, as a legal conclusion, that the deed was fraudulent. Clute v. Newkirh, 46 IS". Y. 684 ; Wallace v. Berdell, 97 N. Y. 13 ; Emry v. Edgerton, 7 Wend. 259 ; see Jackson v. Cornell, 1 Sandf. Oh. 348. But where the debtor was permitted to retain possession of real estate which he had assigned, for a number of years under a nominal lease to his son, without paying any rent, the convey- ance was declared fraudulent and void as against creditors. Bank of Oram,ge Co. v. Fvnk, 7 Paige, 87 ; see Mead v. Phil- lips, 1 Sandf. Ch. 83 ; J)olson v. Kerr, 12 Snpm. Ct. (5 Hun), 643 ; Hitchcock v. St. John, HoflEm. Ch. 511. See Loos v. Wilkinson, 110 N". Y. 195. And in the case of Dewey v. Adams 296 GENERAL ASSIGNMENTS. [CH. XIV. (4 Edw. Ch. 21), an assignment was declared void because the assignee left furniture, embraced by it, in the assignor's posses- sion, renting it to him until a favovable time for sale. When real property was conveyed without consideration by a husband to his wife and the conveyance was not recorded, and the husband remained in the possession and apparent ownership of the property, in the meanwhile conducting a business in which purchases are made on credit, such a conveyance was declared fraudulent against subsequent creditors. Talcott v. Levy, 29 Abb. N. C. 3. See Blennerhassett v. Sherman, 105 U. S. 100 ; Savage v. Murphy, 34 N". Y. 508 ; affi'g 8 Bosw. 75 ; Case v. Phelps, 39 N. Y. 164. The failure to record the deed, though not conclusive evidence, is a suspicions and strong circumstance tending to prove fraudulent intent. Talcott v. Levy, supra. See Perry v. Bedell, 38 State E. 321 ; Crawford v. Neal, 144 U. S. 585. § 241. Subsequent acts of the assignee.— Where the assign- ment has been honestly made for a lawful purpose, it cannot be defeated by proof that the assignee has abused his trust, misap- propriated the property, or acted dishonestly in its disposal. Cuyl&r V. McCartney, 40 N. Y. 221, rev'g 33 Barb. 165 ; Hotop V. Purant, 6 Abb. Pr. 371, note ; Mathews v. PoulPney, 33 Barb. 127 ; Wilson v. Forsyth, 24 Id. 105 ; Eardmamn v. Bowen, 39 JST. Y. 196 ; Casey v. Ja7ies, 37 Id. 608 ; Brown- ing V. Hart, 6 Barb. 91 ; Cox v. Piatt, 32 Id. 126 ; Pac. Mut. Ins. Co. V. Machado, 16 Abb. Pr. 451 ; Am. Ex. Bank v. Webb, 15 flow. Pr. 193 ; Judson v. Abeel, 5 Weekly Dig. 221. Thus, an unauthorized act of the assignee in selling on credit a part of the assigned property cannot make void an assignment which was \alid when made. Mathews v. Poultney, supra. If the assignment is legally complete and perfect, and is in- tended to devote, and does devote, all the debtor's property to the payment of his debts, it cannot be invalidated through the subsequent remissness or ineflSciency of the assignee. Creditors have ample remedy against the assignee for his misconduct if any, and they should be held to their i^medies rather than be allowed to subvert the assignment on the claim that such remiss- ness is an evidence of original fraudulent intent. Olney v. Tanr- § 242. J FICTITIOUS DEBTS. 297 ner, 10 Fed. Rep. 101, 115. Hence the subsequent employment of the assignor, and the continuance of the business by the as- signee, were, in the case last.cited, held not to farnish sufficient evidence of a fraudulent intent. The sale of the assigned property for much less than its inven- tored value when it was duly and properly advertised, and the fact that the property was bought in by third persons in the in- terest of the assignor's wife, were held to furnish slight if any evidence of fraud in the assignment. Tv/rney v. Van Gelder, 75 Supm. Ot. (68 Hun), 481 ; s. c. 52 State R. 664. But the subsequent acts of the assignee, under the principles discussed in the previous sections, may furnish important evi- dence of the fraudulent intent of the assignor when these acts can be connected with previous matters showing that the entire transaction, including the assigmnent, was one. In Dambmcmn v. Butterfield (9 Supm. Ct. [2 Hun], 284), where the action was to set aside an assignment as fraudulent, on the ground that a preferred debt was fictitious, the question arose whether upon an examination of the assignee he could be com- pelled to state what disposition had been made by him of a por- tion of the assets. In delivering the opinion of the court, Mr. Justice Davis said : " It may be true that a valid assignment is not avoidable by the subsequent fraud or misconduct of the assignee ; but where the issue is upon the validity of the instrument itself for fraud, it is competent to show the disposition of the assigned property by the assignee, as tending to throw light upon the alleged invalidity of the assignment. Especially is this so where the fraud alleged is that the preferences to the assignee are of fictitious debts, or of debts that have been wholly or in part paid." § 242. Fictitious and fraudulent debts.— An assignment by an insolvent debtor which undertakes to provide for the payment of debts not owing by the assignor, or for amounts in excess of sums justly due by him, is fraudulent and void, for the manifest reason that the provision for such fictitious debts miist have the effect either to defraud iheiona fide creditors of the assignor, or to delay and embarrass them in the collection of their debts. 298 GENERAL ASSIGNMENTS. [cH. XIV. Weib V. Daggett, 2 Barb. 9 ; Be Camp v. Marshall, 2 Abb. Pr. N. S. 373 ; Fiedler v. Day, 2 Sandf. 594 ; Mead v. Phil- lips, 1 Sandf. Ch. 83 ; Terry v. Butler, 43 Barb. 395 ; Jacobs v. Remsen, 36 N. T. 668 ; Planch v. Scher^nerhorn, 3 Barb. Ch. 644 ; Am. Ex. Bank v. Webb, 36 Barb. 291 ; Bostwick v. Menck, 40 N. y. 383 ; Glaflin v. Hirsch, 19 Wkly. Dig. 248 ; and see Struthers y. Hoffstadt, Id. 242 ; see Dambmann v. Butterfield, 9 Supin. Ct. (2 Hun), 284 ; Cohen v. Jrion, 26 State E. 1, 2 ; Taloott V. Hess, 4 State E. 62 ; Stafford v. Merrill, 69 Supm. Ct. (62 Hun), 144 ; Chambers v. Smith, 67 Supin. Ct. (60 Hun), 248 ; Chandler v. Powers, 9 State K. 169 ; Mrst Nat. Bank v. Raymond, 14 State R. 868 ; First Wat. Bank v. Halsted, 20 Abb. N. C. 155 ; Waples- Platter Co. v. Low, 54 Fed. R. 93 ; Bickham v. Lake, 51 Fed. R. 892, 895. The preference of a debt for which the assignor is not liable, even though he beheves himself to be liable, when the preference is absolute, renders the assignment invalid. Roberts v. Vietor, 130 N. T. 585 ; Chambers v. Smith, 67 Supm. Ct. (60 Hun), 248. See Friedmam, v. Bierman, 50 Supm. Ct. (43 Hun), 387 ; Brown V. Ralsted, 17 Abb. JST. C. 197 ; First Nat. Bank of Westport V. Raymond, 14 State R. 868. This is so for the rea- son that the bona fide creditors are deprived by the preference of property which is rightfully applicable to the payment of their debts. It is for this reason that appropriations of firm property to the payment of individual debts of the members of the firm render an assignment fraudulent as against firm creditors ; see ante, § 191. And the substance of the wrong is that the parties coming in under the assignment cannot dispute the cor- rectness or validity of debts which the assignee is specifically directed to pay at certain and fixed amounts, and if the amounts so directed to be paid are excessive or illegal, creditors are neces- sarily wronged. Roberts v. Yietor, supra. But when the error is one merely of amount, arising from an erroneous calculation of interest or of the amount due, it does not necessarily follow that the assignment will be declared fraud- ulent. Peyser v. Myers, 135 N. Y. 599, 606. The law is interested in the substance and not in the mere appearance. The case of Roberts v. Vietor, supra, having been sent back for a new trial upon appeal from the judgment for defendant on § 242.] FICTITIOUS DEBTS. 299 the second trial (Roberts v. Buckley, 87 Supm. Ct. [80 Hun], 58), it was held that although a preferred debt was stated in the schedule at a larger amount than was actually due, it might be shown that the error was unintentional and the result of a mistake. Where all the debts were contracted in a firm name under which the assignor did business, but they were really the indi- vidual debts of the assignor by whom all the assigned property was owned, the assignment was held not to be fraudulent merely because it described some of the debts as firm debts, and others as individual debts. Gorham v. Innis, 115 N. Y. 87. Where the assignors assigned certain claims to a creditor to reimburse him for money loaned, and afterward made a gen- eral assignment and preferred the creditor, it was held that this did not invalidate the assignment, inasmuch as the creditor was entitled to be paid only once, either out of the assigned claims or by the preference. Blain v. Pool, 13 State E.. 571. And to the same effect is Smith v. Ferine, 121 N. Y. 376 ; and see Smith V. Smith, 136 N. Y. 313. So where the preference is given to the endorser and not to the holder of a note. Weib v. I'homas, 49 State E. 462 ; see cmte, § 214. The burden of proof is upon the party asserting that the pre- ferred debt is fictitious. Maok v. Davidson, 58 Super. Ct. (26 J. & S. 75). Some further illustrations of the application of the general principle will be found in the following cases : In Ka/vanagh v. BecTcwith (44 Barb. 192), where certain debts were overstated in the assignment, but the assignor filed an in- ventory, under the statute, containing the true amounts, the court held that, upon a fair construction of the language of the assignment and the subsequent inventory, the overstatement of the amounts did not render the assignment fraudulent. So, where the assignor, who had been selling goods on commission, preferred the consignors of the goods for an amount of the goods sold by him, but exceeding what he had collected and was liable for, it was held that in the absence of any fraudulent intent, that the preference was not fraudulent and the assignment was good. Whitiny v. Lebenheim, 14 Wkly. Dig. 415. But in the case of Taloott v. Hess, 38 Supm. Ct*. (31 Hun), 282, where the assignor inserted in the schedule of debts made 300 GENERAL ASSIGNMENTS. [cH. XIV. and verified by her, a debt as due which had been in fact paid, and there was no circumstance and no explanation tending to show a mistake, tliis was held to invalidate the assignment. If the assignor is not indebted to the persons named as creditors, the assignment cannot be sustained by showing that such persons were to receive payment upon a verbal trust for real creditors. Frazier v. Truax, 34 Supm. Ct. (27 Hun), 587. The fact that the defendant included in his schedule of liabili- ties more debts than he disclosed to the plaintiff just before the assignment, is, of itself, no evidence of fraud, unless it appears that the debts mentioned in his schedules, or a portion of them, were fraudulent. Freeman v. Campbell, 1 State R. 728. Where it appeared that the assignors, shortly before making the assignment, stated that they owed no private debts, but the as- signment contained preferences to their relatives for sums which were not entered in their books, this evidence cast upon the as- signee the burden of proving that the preferences were bona fide. Beatty v. Soman, 6 State R. 669. Where the assignor made and filed and inserted a sum as due to a preferred creditor, and afterward the preferred creditor pre- sented a claim for a larger amount and the debtor testified to the correctness of the latter claim, it was held that the schedule being truthful, even if the parties subsequently conspired to at- tempt to procure the allowance by the assignee of a fictitious sum, that was not evidence of a fraudulent intent in the making of the assignment. Phillips v. Tucker, 14 State R. 120 ; aSi'd, 122 N. Y. 649. This case illustrates the rule that the fraudu- lent intent must be in the making of the assignment ; ante, % 229. In Friedman v. Bierman, 50 Supm. Ct. (43 Hun), 387, the wife of the assignor was preferred upon an alleged indebtedness, which arose as follows : the wife having brought an action for divorce, the husband paid her the sum of $3000 upon her dis- continuing the action and agreeing to live apart from him ; after- ward she returned to live with him and returned him the $3000, for which he gave .his note, which constituted the preferred in- debtedness ; it was held that the note was without consideration, and the assignment fraudialent. A debt is not necessarily fictitious or fraudulent because the debtor has a good defense to it, of which he might avail himself § 243.] EVIDENCE OF INTENT. 301 if he so desired. Thus a debtor may provide for the payment of usurious debts. Murray v. Judson, 9 N. Y. 73 ; Pratt v. Adams^ 7 Paige, 615 ; Oreen v. Morse, 4 Barb. 332. A debtor is not required to avail himself of the statute against usury to avoid the payment of a debt justly due ; and he may properly provide in an assignment for the payment of any debt which he himself might rightfully pay. Murray v. Jtidson, supra. And when the usurious debt is not specifically preferred in the assignment itself, but is included by the assignor in the in- ventory of his debts prepared and filed in compliance with the statute, he thereby recognizes the validity of such usurious debt and renders it valid and enforceable as against the assigned prop- erty. Chapin V. Thompson, 89 N. Y. 270 ; s. c. 25 Supm. Ct. (18 Hun), 446 ; Matter of Thompson, 37 Supm. Ct. (30 Hun), 195. The same rule and the same reason which applies to usurious debts exists in reference to provisions for the payment of debts barred by the statute of limitations. Livermore v. Nortlirwp, 44 N. Y. 107 ; Dams v. Howard, 80 Supm. Ct. (73 Hun), 345', 349. And to those in which compound interest has been allowed in accordance with agreement. Mellen v. Banning, 55 State R. 319, 328. § 243. Evidence of intent. — A person is presumed to intend the necessary consequences of his own acts ; and when the neces- sary result of an assignment, as shown by unlawful provisions on its face or by undisputed facts determined by extrinsic evidence, is to hinder, delay and defraud creditors, the debtor will be charged with the intent to effect the result which necessarily follows such illegal provisions or facts. Kavanagh v. Beckwith, 44 Barb. 192 ; Webo v. Daggett, 2 Barb. 9 ; Coleman v. Burr, 93 N. Y. 17. While this is true, it is also to be remembered that fraud is never to be presumed, but is to be proved. /Sullivan v. Warren, 43 How. Pr. 188 ; Mchols v. Dinner, 18 N. Y. 295. InShultz V. Hoagland, 85 N. Y. 464, speaking of the evi- dence sufficient to defeat an assignment, Judge Finch remarks : " The case furnishes no exception to the rule that fraud is to be proved and not presumed. {Orover v. WaTceman, 11 Wend. 187.) It is seldom, however, that it can be directly proved, and usually is a deduction from other facts which natu- 302 GENERAL ASSIGNMENTS. [CH. XIV. rally and logically indicate its existence. Such facts, neverthe- less, must be of a character to warrant the inference. It is not enough that they are ambiguous, and just as consistent with inno- cence as with guilt. That would substitute suspicion as the equivalent of proof. They must not be, when taken together and aggregated, when interlinked and put in proper relation to each other, consistent with an honest intent. If they are, the proof of fraud is wanting." And see remarks of Mr. Justice McAdam in White v. Benjamin, 3 Misc. 4-90, 505. When conveyances are attacked for fraud, and there are many facts surrounding the case which cast suspicion upon the trans- action, the defendants should be prepared to meet the allegations of unfairness ; and if they fail to do so the plaintiff will be entitled to the benefit of all the unfavorable inferences which may legitimately be drawn from their neglect and the general features of the case. Ifewman v. Cordell, 43 Barb. 448. An assignor who is a witness in an issue of fact as to whether an assignment or transfer of property was made to hinder, delay or defraud creditors, may be asked whether in making the assign- ment or transfer he intended to delay or defraud his creditors. Seymour v. Wilson, 14 N. Y. 567 ; Forbes v. Waller, 25 N. Y. 430 ; Matlievjs v. Poultney, 33 Barb. 127 ; Persse c§ Brooks Paperworks v. Willett, 1 Robt. 131 ; s. c. 19 Abb. Pr. 4.16 ; Bedell v. Ohase, 34 N. Y. 386 ; Sperry v. Baldwin, 53 Supm. Ct. (46 Hun), 120. But this rule will not be extended so as to allow one who acted as agent for the assignor in the manage- ment of the property to testify as to whether the assignment was made in good faith. Talcott v. Iless, 38 Supm. Ct. (31 Hun), 282. The assignee cannot be asked whether he had an intent to hinder, delay and defraud creditors for the reason that his intent is not material. Kennedy v. Wood, 59 Supm. Ct. (52 liun), 46. Evidence to show that there was no agreement at the time of the assignment that the assignor should retain possession of the assigned property, is not competent. The assignment speaks for itself, and must be judged by its terms and in the light of the contemporaneous and subsequent acts of the parties. Forles v. Waller, 25 N. Y. 430. In the case last cited. Judge Allen says (p. 439) : " The use that § 244.] EVIDENCE OF INTEKT. 303 was made of the assignment, and the acts of the parties under it, must furnish the data to judge of the intent and motives with which it was executed. The assignee cannot give evidence of agreements not contained in the assignment, to uphold it or change its legal effect. In terms, the assignment gave the assignee the right of immediate possession ; and whether he exercised that right seasonably was a fact to be established by evidence like other facts, and not by evidence of what the parties to the in- strument privately agreed should or should not be done." In Acker v. Leland, 109 N. Y. 5, it was held that in an action to set aside the assignment judgments recovered by preferred creditors were competent evidence as proof of the validity of the debts. § 244. Declarations of the assignor and assignee as evi- dence to impeach the assignment. Whether in an action by creditors to attack an assignment, statements made by the as- signor either before or after the assignment are competent evi- dence to defeat the title of the assignee, and if so, whether they are generally admissible, or only under special circumstances, are important inquiries. There can be no doubt that declarations of the assignor are competent evidence against himself. Loos v. Wilkinson, 110 N. Y. 195, 210 ; Xennedy v. Wood, 59 Supm. Ct. (52 Hun), 46. And since he is a necessary party to a credit- or's action to set aside an assignment, such evidence cannot be excluded by the court in actions of that character. Zoos v. Wil- kinson, sujpra ; Scofield v. Spaulding, 61 Supm. Ot. (54 Hun), 523. But after the evidence has been admitted the inquiry still remains whether it can serve as a basis of a judgment to defeat the a.ssignee's title. As a general rule between vendor and vendee declarations of the vendor either before or after the sale are incompetent to effect the vendee's title, " unless the statements sought to be proved were contemporaneous with the transaction of sale, and, as being illustrative of it, would fairly constitute parts of the res gestcB I or where the evidence tended to show that the party, as a pseudo vendor only, was engaged in a joint scheme with the pur- pose of defrauding others through the alleged transactions ; in which case what he may have stated respecting it at any time 304 GENEEAL ASSIGNMENTS. [oH. XIV. would be relevant and material in disclosing it and in defeating its successful accomplishment." Flannery v. Van Tassel, 131 N". Y. 639 ; see Paige v. Oagwin, 7 Hill, 361 ; Baldwin v. Short, 125 N. Y. 553 ; Bush v. Roberts, 111 N. Y. 278 ; FooU v. Beecher, 78 N. Y. 155 ; Van Gelder v. Van Gelder, 81 N. Y. 625 ; Tabor v. Van Tassell, 86 N. Y. 642 ; Truax v. Slater, 86 N. Y. 630 ; Clews v. Kehr, 90 N. Y. 633 ; Jones v. East Society of M. K Church, 21 Barb. 161 ; Carver v. Barker, 80 Supm. Ct. (73 Hull), 416. In accordance with this general rule it is settled by abundant authority that the declarations of the assignor cotemporaneously with the assignment or in immediate contemplation of it are ad- missible against the assignee as being in the nature of res gesta. Loos V. Wilkinson, 110 N. Y. 195 ; Cuyler v. McCartney, 40 N. Y. 221 ; Newlin v. Lyon, 49 JST. Y. 661. In Flagler v. Wheeler, 47 Supm. Ct. (40 Hun), 125, declarations of the assignor made prior to the preparation and execution of the assignment were not regarded as part of the res gestce ; and see Scofield v. Spaulding, 61 Supm. Ct. (54 Hun), 523. If it be proved as a fact in the case that the assignor and as- signees were in a conspiracy to defraud the creditors, then the acts and declarations of either, made in execution of the common purpose and in aid of its fulfilment, are competent against any of the parties. But the existence of such conspiracy must be established as against the assignee, by evidence independent of any declarations and acts of the assignor subsequent to the assign- ment, and such declarations and acts cannot properly be used in addition to the other evidence, when not sufficiently clear with- out it, to establish that fact. Loos v. Wilkinson, 110 N. Y. 195 ; Cuyler v. McCartney, 40 N. Y. 221 ; Newlin v. Lyon, 49 N. Y. 661 ; see Waterbury v. Sturtevant, 18 Wend. 353 ; Sprague v. Kneeland, 12 Wend. 161 ; Pease v. Batten, 31 State E. 57. In some cases it has also been held that when the debtor re- mains in possession of the assigned property, his declarations are competent against the assignee. Adams v. Davidson, 10 N". Y. 309 ; Loos v. Wilkinson, 110 N. Y. 195 ; Jellenik v. May, 48 Supm. Ct. (41 Hun), 386, but this statement must probably be qualified. The mere fact of possession will not make the as- signor's declarations evidence against the assignee unless they are § 244. J DECLAEATIONS OF ASSIGNOR. 305 in the nature of res gestae,. Loos v. Wilkvnson, supra ; Soqfield v. 8paulding, 61 ISupm. Ct. (54 Hun), 523 ; and see Adams v. Davidson, supra ; criticised in Cuyler v. McCartney, 40 N. Y. 221 ; and also in Coyne v. Weaver, 84 N. Y. 386, 393 ; and see on admissibility of evidence of declarations of grantor against grantee after delivery and recording of deed. Gibney v. Mai'cliay, 34 N. Y. 301 ; Vrooman v. King, 36 N. Y. 477 ; Eutchins v. HutcUns, 98 N. Y. 56, 64 ; McDuffie v. Clark, 46 Supm. Ct. (39 Hun), 166, 170 ; Carver v. Barker, 80 Supm. Ct. (73 Hun), 416. Yet where the declarations are not admissible as part of the res gestm, and where no evidence connecting the assignee with a scheme or conspiracy of the debtor to defraud creditors by the assignment has been shown, it has nevertheless been held that declarations of the assignor made before the assignment are ad- missible against the assignee in a creditor's action brought against the assignor and assignee to set aside the assignment. Ken- nedy V. Wood, 59 Supm. Ct. (52 H un), 46, 49 ; Passavant v. Ca/iitor, 43 State K. 247 ; Yon Sachs y.Kretz, 72 N. Y. 548. See also Tabor v. Van Tassell, 86 N. Y. 642, 643 ; Wright v. Nostramd, 94 N. Y. 31, 41 ; First Nat. Bank v. Moffatt, 84 Supm. Ct. (77 Hun), 468, 471 ; conl/ra, Flagler v. Wheeler, 47 Supm. Ct. (40 Hun), 125. In Passavant v. Camior, supra, it is said by Van Brunt, J., announcing the opinion of the court, that any evidence which would be admissible against the assignor if he had been the sole party to the action is proper as against the assignee upon the question of the assignee's good faith. In the cases cited a distinction is drawn between the competency of such evidence as between vendor and vendee, and assignor and as- signee under a general assignment, on the ground that the as- signee is not a purchaser for value. Yon Sachs v. Kretz, supra, is not a direct authority to the proposition stated. That was an action by an assignee in bankruptcy, and it was held that declara- tions of the bankrupt made before the bankruptcy were admissi- ble as evidence against the assignee to support a claim against the estate of the bankrupt. In that case title passed to the as- signee by operation of law. In Passamant v. Cantor, supra, there was a dissent by Barrett, J. The ai-gumeut upon which the prevailing opinion in these cases rests is that the assignor's intent is the material inquiry, and that his declarations are direct 20 306 GENERAL ASSIGNMENTS. [CH. XIV. evidence of that intent, which, if established to have been fraudu- Jent, defeats the assignee's title irrespective of his complicity in the fraud. Since, therefore, his title rests upon the assignor's intent and not upon his knowledge of that intent, and since he stands only in the place of the assignor, evidence which is com- petent against the assignor ought also to be competent as against him. The answering argument is that there is no such identity of interest between the assignor and assignee as is assumed ; that the assignee holds for creditors and represents their interests primarily, and not those of the assignor only or primarily, and that all the considerations which go to the exclusion of such evi- dence in the ease of vendor and vendee apply with equal force to the relation of assignor and assignee. The general tendency is to open the door to such evidence either by extending the area of res gestm so as to take in the gen- eral conduct of the assignor in his business leading up to the failure, or upon the broader ground above stated. The reception in evidence in such eases of the entries con- tained in the books of account kept by the debtor is in harmony with the rule respecting the competency of other declai-ations of the assignor. These are competent not only for the purpose of showing the declarations of the assignors and the financial con- dition of the debtor's business, but also for the purpose of show- ing the acts and conduct of the assignor pertinent to the inquiry of intent. Loos v. Wilkinson, 110 N. Y. 19.5. See Von Sachs v. J{ret3, 72 N. Y. 548 ; Becker v. Xooh, 104 N. Y. 394. In actions of replevin and in actions to recover for conversion brought against the assignee by creditors seeking to disaffirm sales made to the assignors on the ground of fraud to which the as- signor is not a party, it has been many times decided that the declarations of the assignor are inadmissible against the assignee, save where a conspiracy to defraud between the vendor and ven- dee has been shown or where they are part of the res gestae. Flannery v. Van Tassel, 131 N. Y. 639 ; s. o. 127 N. Y. 631 ; Bullis V. Montgomery, 50 N. Y. 352 ; Cuyler v. McCartney, 40 B". Y. 221 ; Truax v. Slater, 86 JST. Y. 630 ; Ilagler v. Schoeffel, 47 Supra. Ct. (40 Hun), 178 ; Peck v. Grouse, 46 Barb. 151 ; Ball v. Loomis, 29 N. Y. 412 ; Wells v. O'Connor, 34 Supm. Ct. (27 Hun), 426 ; Vidvard v. Powers, 41 Supm. Ct. (34 Hun), 221. § 245.] ASSIGNMENT FEAUDULENT IN BANKRUPTCY. 307 And it seems that this rule applies also to affidavits of such declarations to be used in judicial proceedings. Mimesheimer v. Mayer, 66 How. Pr. 484. The declarations of the assignor made after the assignment are not admissible to defeat the assignee's title, except upon proof of conspiracy to defraud. Coyne v. Weaver, 84 N. Y. 386, 392 ; Burnham v. Brennan. 74 N. Y. 597 ; Schofield v. Scott, 20 State R. 815 ; Cuyler v. McCa/r-tncy, 40 N. Y. 221 ; Jacobs v. Remsen, 36 N. Y. 668, 670 ; Newlin v. Lyon, 49 N. Y. 661 ; Nayes v. Morris, 63 Supm. Ct. (56 Hun), 501 ; Beste v. Berger, 110 N. Y. 644 ; Scofield v. Spauldvng, 61 Supm. Ct. (54 Hun), 523 ; Mimesheimer v. Mayer, 66 How. Pr. 484 ; or, as has been held in some cases on proof of the continued possession of the as- signor, Newlin v. Lyon, 49 N. Y. 661 ; Adams v. Davidson, 10 N. Y. 309 ; this case commented on in Cuyler v. McCartney, 40 JS". Y. 221 ; and also in Coyne v. Weaver, 84 N. Y. 386, 393 ; Scofield V. Spaulding, 61 Supm. Ct. (54 Hun), 523. A posses- sion resumed after delivery once made and continued is not enough to let in such evidence. Tilson v. Terwilliger, 56 N. Y. 273. The examination of the assignor taken in proceedings supple- mentary to execution after the assignment is not competent evi- dence against the assignee. Scofield v. Spaulding, 61 Supm. Ct. (54 Hun), 523 ; Passavant v. Cantor, 43 State R. 247, 252. Although where the assignor has been called as a witness in support of the assignment such examination may be used against all the parties for the purpose of contradicting the wit- ness. Wright V. Nostrand, 94 N. Y. 31 ; First Nat. Bank v. Mofatt, 84 Supm. Ct. (77 Hun), 468. When the debtor is called by the assailant of the assignment and gives evidence in chief which would justify the conclusion that he had made it with fraudulent intent, and on cross exami- nation gives evidence in explanation of his apparently fraudulent conduct, the whole of the assignor's evidence must be submitted to a jury, and the court should not dismifis the action on the ground that the party calling the witness is necessarily bound by the explanation since he cannot impeach his own witness. Becher v. Koch, 104 N. Y. 394. § 245. Assignment, when fraudulent in bankruptcy. — 308 GENERAL ASSIGNMENTS. [CH. XIV. Under the operation of the late bankrupt law, it was determined that a general assignment, executed in good faitii and for the equal benefit of all creditors, and in conformity w^ith the law of the State where it was made, was not fraudulent and void, but at most was voidable only by the assignee in bankruptcy in pro- ceedings instituted by him within the time and in the manner provided in the bankrupt law. Mayer v. Hellman, 91 U. S. 496 ; In re Kimhall, 16 N. B. R. 188 ; Eeed v. Mclntyre, 98 TJ. S. 507. And the Supreme Court of the United States de- cided in the case first cited that the assignee, under the common law assignment, would not be required to surrender the estate to the bankruptcy assignee when the proceedings in bankruptcy were not instituted within six (now three) months after the execution of the assignment pursuant to U. S. R. S. § 5130. But, unless the petition has been filed within the time limited, the assignment cannot be impeached by the assignee in bank- ruptcy, except upon the ground of actual fraud ; nor can he re- cover possession of the assigned estate {Mayer v. Hellman, 91 U. S., 496 ; s. c. 13 N. B. R. 440 ; In re Kimball, 16 N. B. R. IBS) ; and, until the general assignment is set aside as void, as against the assignee in bankruptcy, the title remains in the as- signee under the general assignment. Belden v. Smith, 16 N". B. R. 302 ; /n re Manahan, 19 Id. 65. Where the assignment is not infected with actual or constructive fraud, the courts of this State will not compel the assignee under the assignment to surrender the trust estate to the assignee in bankruptcy. Haas V. O'Brien, 66 N. Y. 597 ; s. c. 52 How. Pr. 27 ; s. o. 16 ISr. B. R. 508 ; see 17irasher v. Bentley, 59 N. Y. 649 ; s. c. 1 Abb. N. C. 39 ; Syracuse, B. c& JV. T. B. B. Co. v. Collins, 57 N. y. 641 ; s. c. 1 Abb. JST. C. 47 ; Boese v. King, 108 U. S. 379 ; affi'g 78 N. Y. 471 ; rev'g Boese v. Loche, 24 Supra. Ct. (17 Hun), 270 ; Coates v. First Nat. Bank, 47 Super. Ct. (15 J. & S.) 322. Contra, Bolson v. Kerr, 52 How. Pr. 481 ; s. o. 16 N. B. R. 405 ; see Von Rein v. ElTcus, 15 Supm. Ct. (8 Hun), 516 ; 8. c. 15 N. B. R. 194. And where no proceedings in bankruptcy have been instituted against a debtor who has made an assignment in conformity with the laws of this State, there was held to be nothing in the existence of the bankrupt law, or any provision contained in it, § 246. J LEVY AFTER ASSIGNMENT. 309 which rendered such an assignment void. Thrasher v. Bentley, 1 Abb. N. C. 39 ; less fully, 59 N. Y. 649 ; Syracuse, B. & N. T. B. E. Co. V. Collins, 1 Abb. N. C. 47 ; less fully, 57 N. Y. 641. In the case of Dolson v. Kerr (52 How. Pr. 481 ; s. c. 16 N. B. R. 405), it seems to have been assumed that the State as- signee had made a voluntary surrender to the bankruptcy as- signee, and the principal point upon which that case was decided has been since overruled in In re Biesenthal, 15 N. B. R. 228. Hence it is no answer to an action brought by an assignee under a general assignment, that the assignment is invalid in bank- ruptcy. Bostwich V. Burnett, 74 N. Y. 317 ; rev'g 18 Supm. Ct. (11 Hun), 301 ; Williams v. Fitts, 55 How. Pr. 331. So far as Dolson v. £err (52 How. Pr. 481) expresses any other opinion it must be regarded as overruled. The assignment is void only under the provision of the bank- rupt law, and as against the assignee in bankruptcy. Seaman v. Stoughton, 3 Barb. Ch. 344, 349 ; Dodge v. Sheldon, 6 Hill, 9 ; Freeman v. Deming, 3 Sandf. Ch. 327 ; see Allen v. Mont- gomery, 10 N. B. R. 503. But in an action by the assignee in bankruptcy appointed in proceedings instituted within the time limited, an assignment for the benefit of creditors, although made for the equal benefit of all creditors, will be set aside. Such a conveyance is held by the bankruptcy courts to be conclusive evidence of an intent to defeat the operation of the bankrupt act. Globe' Ins. Co. v. Cleveland Ins. Co. 14 N. B. R. 311 ; Jackson v. McCulloch, 13 Id. 283 ; Barnewall v. Jones, 14 Id. 278 ; Macdonald v. Moore, 15 Id. 26 ; In re Biesenthal, Id. 228 ; In re Temple, 17 N". B. R. 345 ; Barnes v. Eettew, 8 Phila. 133 ; Piatt v. Pres- ton, 19 F. B. R. 241 ; Binder v. Lewis, Id. 455. Until the general assignment is set aside as against the assignee in bankruptcy, the title to the assigned property remains in the assignee under the general assignment. Belden v. Smith, 16 ]Sr. B. R. 302. § 246. Levy after assignment and before bankruptcy. — When a judgment creditor levy executions upon the assigned property after the execution of the assignment and before pro- 310 GEISTEEAL ASSIGNMENTS. [CH. XIV. ceedings are instituted in bankruptcy, and the assignment is con- sequently set aside at the suit of the assignee in bankruptcy, the levy does not become a lien upon the property as against the assignee in bankruptcy. Reed v. Mclntyre, 98 U. S. 507 ; In re Biesenthal, 15 N. B. R. 228 ; Johnson v. Rogers, 15 JSf. B. E. 1 ; In re Walker, 18 N. B. R. 56 ; Belden v. Smith, 16 N. B. R. 302. Contra, Maadonald v. Moore, 15 N. B. R. 26. And the assignee in bankruptcy, in an action brought by him against the State assignee to set aside the assignment, to which action the execution creditors are parties, may recover back from the execution creditors moneys received by them on a levy and sale of the assigned property, made by the sheriff after the as- signment and before the tiling of the petition in bankruptcy. Linder v. Lewis, 19 N. B. R. 455. Where, after the assignment, but before the commencement of the proceedings in bankruptcy, the sheriff levied upon and sold the assigned property, and the voluntary assignee thereupon sued the sheriff for trespass, and he defended on the ground that the assignment was fraudulent and void, and obtained a judg- ment in his favor, it was held that the assignee in bankruptcy was bound by the judgment as being in privity with the sheriff, and that the property was bound by the prior lien of the execu- tion. In re Biesenthal, 18 N. B. R. 120. But where the assignment became void because the inventory and schedule were not filed within thirty days after the date of the assignment, as provided by the Act of 1877 (before the amendment of 187S), and an execution was levied on the as- signed property, it was held that the title of the assignee, ap- pointed in bankruptcy proceedings commenced before the time to file the schedule expired, was superior to the lien of the exe- cutions. In re Groughwell, 17 N. B. R. 337. § 247. Protection of State assignee in bankruptcy. — The State assignee is protected even in the bankrupt court, when the assignment is set aside, to the amount of his expenses and reason- able commissions. Macdonald v. Moore, 15 N. B. R. 26 ; In re Pierce (& Holbrooh, 3 Id. 258 ; see Catlin v. Foster, 3 Id. 540 ; In re Cohn, 6 Id. 379 ; In, re Stubhs, 4 Id. 376 ; Burk- § 248.] PROTECTION Oh- ASSIGNEE. 311 holder v. Stump, 4 Id. 59Y ; In re Lains, 16 Id. 168 ; Olarh v. Marx, 6 Ben. 275 ; Havemeyer v. Loel, 5 Abb. N. 0. 338. But it has recently been held that although the necessary ex- penses of administering the estate while in his hands will be allowed to the State assignee, yet he will not be allowed com- pensation for his own services except in a case where it is clear that the estate will not be subjected to a double expense. In re Kurth, 17 N. B. E. 573. .§ 248. Assignments fraudulent as against proceedings under the non-imprisonment act. — A debtor could not, by executing a general assignment, defeat the priority of creditors who had instituted regular and valid proceedings against him under the " non-imprisonment act" (Laws of 1831, c. 300). This act has now been repealed. Thus, while proceedings were pending against the debtor under that act, he executed a general assignment of all his property for the benefit of all his creditors without preference. On a bill filed by a creditor who had insti- tuted the proceedings to set aside the assignment, it was held that the assignment was a fraud upon the law, and the assignee under the general assignment was held to be a trustee for the creditors to the extent of their debts. Spear v. Wardell, 1 IST. T. 144 ; Hall v. Kellogg, 12 N. Y. 325 ; Wood v. Bolard, 8 Paige, 556 ; see Matter of "Uurst, 7 Wend. 239. CHAPTER XV. PROCEEDINGS OF CREDITORS TO A. VOID THE ASSIGNMENT. § 249. In general. — Where the assignment is fraudulent and void as against creditors, they have their election either to regard it as a nullity and proceed to the enforcement of their claims by legal process against the assigned property, or they may resort to an action to have the assignment declared fraudulent and void as to them ; or, in certain cases, they may proceed by attachment under the provisions of the Code of Civil Procedure. These proceedings on the part of creditors to satisfy their claims out of the assigned property are the subject of consideration in the present chapter. § 250. Creditors who assent.— It is not all creditors who may assail the assignment. An assignment, even though void as to creditors who choose to disaffirm it, is valid as to those creditors who are provided for in it, and who think proper to insist upon their rights against the assignee. Jfills v. Argall, 6 Paige, 577 ; Hone v. Henriquez, 13 Wend. 240 ; affi'g Ilenriques v. Hone, 2 Edw. 120 ; Pratt v. Adams, 7 Paige, 615. Having intentionally and with knowledge of the facts accept- ed the assignment, they cannot thereafter attack its validity. An assignment is in this state a deed of trust, it is not merely a deed of agency. By it the title passes completely out of the debtor and into the assignee, who takes merely in a representa- tive capacity, the real grantees being the creditors. When, therefore, creditors with knowledge of the facts have accepted this grant, the rule which applies in the case of deeds and wills applies equally to them. That rule is that a person cannot ac- cept and reject the same instrument, and having availed himself of part, defeat its provisions in any other part. JN^oys v. Mor- daunt and Streatfield v. Streatjield, Lead. Cases in Eq., 6th ed., § 250. J CREDITORS WHO ASSENT. 313 Vol. 1, 393, 395. Moller v. Tuska, 87 N. Y. 166 ; Conrow v. Little, J 15 N. Y. 387; Terry v. Hunger, 121 N. Y. 161. When creditors with knowledge of tlie facts have accepted a benefit under an assignment they cannot thereafter question its validity, nor insist upon some other but inconsistent legal right. CoAianagh v. Morrow, 67 How. Pr. 241 ; Johnson v. Rogers, 15 N. B. E. 1 ; Thompson v. Fry, 58 Supm. Ct. (51 Hun), 296 ; Levy v. James, 56 Supm. Ct. (49 Hun), 161. The application of the general doctrine of election of rights to a creditor under a general assignment is referred to jvith appar- ent distrust in Mills v. Parhhurst, 126 N. Y. 89, 93. Judge Gray says : " It is conceivable that the rule may be so ex- tended as to apply to the case where a creditor comes in under an assignment by his debtor for the benefit of creditors, in such way and in such attitude as should preclude him from thereafter assailing its validity." It may be that, in view of this state- ment, the point is to be regarded as open and undetermined in the Court of Appeals. The weight of authority, however, sup- ports the rule as stated above. Mills v. Argall, 6 Paige, 577 ; Sone V. Henriguez, 13 Wend. 240 ; affi'g 2 Edw. 120 ; Pratt v. Adams, 7 Paige, 615 ; Oavanagh v. Morrow, 67 How. Pr. 241 ; Johnson v. Rogers, 15 N. B. E. 1 ; Thompsons. Fry, 58 Supm. Ct. (51 Hun), 296 ; Levy v. James, 56 Supm. Ct. (49 Hun), 161. In Cavanagh v. Morrow, supra, Mr. Justice Van Vorst said (p. 245) : " When a debtor in failing circumstances has made an assignment of his estate for the payment of his debts, his creditors may come in under the assignment and insist that the assignee shall, with fidelity, execute the trust in pursuance of the terms of the instrument. Or the creditors may stand aloof, refusing to recognize the validity of the instrument, on the ground of actual fraud or other illegality, and they may institute appropri- ate proceedings at law or in equity to test the validity of the assignment in the courts. Creditors have an election as to which course they will adopt. They cannot pursue both. Creditors cannot in one moment take steps in recognition of the assign- ment, and in the line of its strict enforcement, according to its terms, and seek to hold the assignee to its performance, and in the next repudiate it as fraudulent and void." So in Levy v. James, 56 Supm. Ct. (49 Hun), 161, when 314 GENERAL ASSIGNMENTS. [CH. XV. creditors notified the assignee in writing that they accepted the assignment, it was held that in the absence of the knowledge of any new fact which might have affected tlieir action the cred- itors were precluded from afterward attacking the assignment. § 251. When creditors will be held to have accepted the assignment. — It may well be doubted whether the mere pres- entation of a verified claim by a creditor to the assignee is such an acceptance of the assignment as will amount to an irrevocable acceptance gf the assignment by a creditor. That it will not has been held in Taloott v. Hess, 4 State R. 62 ; Schofield v. Scott, 20 State R. 815 ; Turneij v. Van Odder, 75 Supm. Ct. (68 Hun), 481 ; s. c. 52 State R. mi ; Thompson v. Fry, 58 Supm. Ot. (51 liun), 296 ; and see Cavanagh v. Morrow, 67 How. Pr. 241 ; Wilson Bros. W. & T. Co. v. Daggett, 9 Civ. Pro. 408, 411 ; McLean v. Prentice, 41 Supm. Ct. (34 Hun), 504. A person who by his bill claims a beneficial interest under ftn assignment without alleging it to be fraudulent, cannot be per- mitted at the hearing to claim relief on the ground that the as- signment is proved to be fraudulent. Ontario BamJc v. Root, 3 Paige, 478 ; Rome Exch. Bamk v. Fames, 4 Abb. Dec. 83 ; s. c. 1 Keyes, 588 ; Jewett v. Woodward, 1 Edw. 195. So if a creditor, with knowledge that an assignment by his debtor is fraudulent in law upon its face, enters into an agreement with the debtor and the trustees named in the assignment for the man- agement of the trust property — the performance of such agree- ment having been entered upon — he is precluded from impeach- ing the assignment for such patent defect. Rapalee v. 8tewa/rt, 27 ]Sr. Y. 310. Where a creditor under an assignment which is liable to be defeated for fraud, takes a dividend, he cannot afterward avoid the assignment without, at least, restoring the dividend to the assignee. Ex parte Freeman, 4 Yes. 836 ; Ex parte Grosvenor, 14 Ves. 587 ; Wells v. Munro, cited in Balcock v. Bill, 43 Barb. 577. But where the partner of a creditor had received a payment on account of his debt from the assignee, and he had been informed that the creditors were all to share alike under the as- signment, and was ignorant of the fraudulent circumstances connected with it, it was held that he was not by such receipt § 251.J CEEDITOES WHO ACCEPT. 315 precluded from setting aside the assignment for fraud. Van Nest Y. Toe, 1 Sandf. Ch. 4. And when the creditors were consulted by the assignors before the assignment was executed, and were cognizant of the financial condition of the assignors, and assented to the plan of making a general assignment, and, after it was executed, discontinued actions which they were prosecuting for the recov^ery of tlieir debts, in conformity to an understanding between the assignor's other creditors and themselves that they would thus discontinue if the assignment should be made, it was held that, having con- curred in the execution of the assignment, they could not be heard to allege that it was fraudulent, because of facts of which they were fully informed when they gave their assent. John- son Y. Rogers, 15 N. B. E,. 1. So a creditor may, by his conduct and actions, acquiesce in the fact of the assignment and its legality, and in the right of the assignee to manage the assigned estate, and dispose of the same for the benefit of those interested under the deed of trust, in pursuance of its terms, and so preclude himself from the right to attack the assignment. The creditor, however, must have knowl- edge or means of knowledge of the wrongful acts, of which he afterward complains, at the time of the acquiescence. Cama- nagh v. Morrow, 67 How. Pr. 241. But a creditor will not be presumed to have knowledge of the laws of a foreign State, and when a creditor entered into a negotiation or agreement with an assignee named in an assignment executed in Pennsylvania, which was invalid because not recorded as required by the laws of that State, it was held that this was not such an election as precluded the creditor from attacking the validity of the assign- ment. SUdman v. Davis, 93 N. Y. 32 ; rev'g 11 Weekly Dig. 86. Under the New Jersey statute which bars the creditor who proves his debt under an assignment from having afterward any action or suit at law or equity against the assignor or his repre- sentatives, where a firm makes an assignment of firm property merely, a firm creditor who proves his debt under such assign- ment, is not precluded from afterward suing the individual mem- bers of the firm. Huggard v. Lehman, 43 Supm. Ot. (36 Hun), 30r ; see note Am. L. Keg. N. S. 403, 411. 316 GENERAL ASSIGNMENTS. [CH. XV. But the mere fact that a creditor purchases a portion of the assigned property from the assignee does not preclude him from insisting that tlie assignment is void. Haydoch v. Coope^ 53 N. T. 68 ; see F aimer- v. Smith, 10 N. Y. 303. In the case of the American Exch. Bomk v. Webb (36 Barb. 291), where, after the execution of an assignment which was fraudulent and void as against creditors, the wife of the assignor entered into an arrangement w^ith tiie assignee, by which she agreed to release her dower upon condition that, if the assign- ment was held valid, she should receive the amount provided for her under the assignment, and if invalid, that she should have her dower out of the proceeds, and the plaintiff assented to these terms, it was held that there was nothing in these facts which should prevent the plaintiff from maintaining an action to set aside the assignment as fraudulent. § 252. Creditors attacking unsuccessfully may share in assignment. — But the converse of the proposition stated in the foregoing sections is not true. A creditor who brings an action to set aside an assignment as fraudulent in which he is defeated is not thereby precluded from afterward sharing in the distribu- tion of the assigned estate. Mills v. ParkJiursi, 126 N. Y. 89. So a creditor who has obtained an attachment under which he attempts to levy on the assigned property but takes nothing is not precluded from afterwai'd maintaining an action to compel an accounting under the assignment. Sternfeld v. SiTnonaon, 51 Snpm. Ct. (14 Hun), 429 ; and see also ladin v. Henlein, 2 How. Pr. N. S. 211, 218. § 253. Creditors who are not injured. — A creditor cannot avoid an assignment because it is illegal if it benefits instead of injuring him. Fox v. Heath, 16 Abb. Pr. 163 ; see Moseley v. Moseley, 15 N. Y. 334 ; Fort Stanwis Bank v. Leggett, 51 N. Y. 552. No creditor but the one who is hindered, delayed or defrauded by the particular provision complained of, can avoid the instrument on that account. Thus, where a general assign- ment by a partnership gives preference to the payment of the partnership debts, a creditor of the partnership cannot have the assignment set aside as void, because its provisions as to the sub- § 254.J OEEDITORS "WHO AKE NOT INJURED. 317 sequent payment of creditors of individual partners contain a direction calculated to hinder and delay them. Morrison v. At- well, 9 Bosw. 503 ; Scott v. Guthrie, 10 Bosw. 408 ; Powers v. Graydon, Id. 630. So an application of individual property to the payment of firm debts since it benefits instead of injuring the firm creditors, is not available to the firm creditors as ground for impeaching an assignment. Haynes v. Brooks, 116 N. Y. 487 ; Eoyer Wheel Co. V. Fielding, 101 N. Y. 504, 510 ; Croolc v. Rindsltopf, 105 N. Y. 476. A distinction is to be observed betvsreen void and voidable as- signments. Assignments which never become operative because not legally executed, or which are declared void by statute, as, for instance, assignments with preferences made by limited part- nerships, may be adjudged void at the suit of any judgment-cred- itor. Such assignments stand in the way of the enforcement by any creditor of his claim against his debtor. But where the assignment is good between the parties, and the creditor seeks to set it aside because made with a fraudulent intent, then the rule applies that one cannot be heard to complain of that as a fraud upon him which is in no respect injurious to himi § 254. Proceedings by attachment — Fraudulent intent of debtor. — The Code of Civil Procedure, § 636, provides for the issuing of a warrant of attachment, against the debtor's property in certain cases, upon proof that the debtor has or is about to assign his property with intent to defraud his creditors. Cred- itors may, therefore, avail themselves of this remedy where their debtor has made a general assignment with such intent. The character of the proof required to warrant the conclusion of such fraudulent intent must primarily be considered. In the first place the mere fact that an assignment is invalid because of a failure to comply with some statutory requirement or because it is declared void by statute, will not justify a finding of a fraudulent intent. Illustrations of the first of these instances will be found in a case where the assignment has not been duly acknowledged. The assignment is inoperative but not neces- sarily fraudulent. Tim v. Smith, 13 Abb. N. C. 31. So an omission to record an assignment is not necessarily evidence of a 318 GENERAL ASSIGNMENTS. [CH. XV. fraudulent intent on the part of the assignor in making it. Denser v. Mundy, 5 Kobt. 636. The omission to do any of the acts required under the statute to render the assignment valid, as that one partner in a firm fails to sign an assignment of' the firm property, or any other circumstance establishing the mere invalidity of the assignment, is not available on an applica- tion for an attachment except so far as it bears on the question of a fraudulent intent in making the assignment. "If," says Daly, J., " it is wanting in any essential requisite to its validity as a legal instrument, it will give the assignee no title to the property, which may then be.levied upon by judgment-creditors, or other remedies may be taken to prevent the assignee from car- rying the trust into effect. But the property cannot be seized in the first instance, nor an attachment sustained, unless the assign- ment was made with a fraudulent intent." Place v. Millet', 6 Abb. Pr. N. S. 178, 180 . So it is said by Monell, J., in Scott V. Guthrie, 25 How. Pr. 481 : " It does not follow that because the omission to do any or all of the acts required by the law of 1860, relative to assignments for the benefit of creditors, may render an assignment inoperative and void, that it is thereby rendered fraudulent also." Again, when by the terms of a pro- hibiting statute an assignment is declared " void," the making of such an assignment will not sustain the issuing of a warrant of attachment. An illustration of this is an assignment by a limited partnership giving preference. Such an assignment is by statute declared void, but it is not, therefore, necessarily fraudulent. Whether proof of constructive fraud merely — that is of such acts as the law declares to be injurious to creditors and stamps as fraudulent, although done without any fraudulent motive or even with an honest motive — will sustain an attachment, has been doubted. Such constructive frauds, when established, will warrant the filing of a creditor's bill by means of which a judg- ment-debtor may ultimately reach the property on the ground that it was assigned with intent to defraud, and it is difficult to see why the same end should not be obtained on the same facts and same language of the statute by means of an attachment. But in MilUken v. Dart (33 Supm. Ct. [26 Hun], 24), when in an assignment the assignee was given a power to sell on credit, which is conclusive evidence of a fraudulent intent by the as- § 255. J PROCEEDINGS BY ATTACHMENTS. 319 signor in making the assignment nnder the statute of frauds, it was held that in the absence of a fraudulent motive, the assign- ment, though fraudulent in law, was not made with the intent to defraud creditors within the meaning of the attachment law. A dictum of Sutherland, J., to a similar effect, will be found in Behnont v. Zame, 22 How. Pr. 365. And to the same purport are BlacMngton v. Goldsmith, 3 How. N. S. 77. See Friend v. Michaels, 15 Abb. IST. 0. 354. Wherever an assignment is made with actual and not merely constructive fraudulent intent, creditors may resort to an attach- ment. Many of the cases already cited in the previous chapter concerning fraud in assignments demonstrated by extrinsic facts, were cases arising under the attachment laws. § 255. Proceedings by attachments — What property can be levied on. — When a warrant of attachment has been issued against the property of a debtor who has made a general assign- ment, the question at once arises how far the sheriff holding the warrant will be justified in seizing the assigned property. As to personal property capable of manual delivery it is very clear that the sheriff may seize such property under the warrant, and will thereby obtain a lien upon it, and may defend and maintain his possession and lien by proving tliat the assignment was invalid and the property, therefore, the defendant's. Hess v. Hess, 111 ISr. T. 306 ; Einchey v. Stryher, 28 N. Y. 45 ; s. c. 26 How. Pr. 75 ; s. 0. 31 jST. Y. 140 ; Hall v. SU-yher, 27 N. Y. 596 ; rev'g 29 Barb. 105 ; s. c. 9 Abb. Pr. 342 ; Ga/rr v. Van Hoesen, 33 Supm. Ct. (26 Hun), 316 ; Gastle v. -Lewis, 78 N. Y. 131 ; Jacohs v. Remsen, 12 Abb. Pr. 390 ; s. c. 35 Barb. 384 ; affi'd, 36 N. Y. 668 ; see Frost v. Mott, 34 N". Y. 253 ; Kelly v. Lane, 42 Barb. 594 ; s. c. 28 How. Pr. 128 ; SchlMSselY.Willet, 12 Abb. Pr. 397 ; Skinner v. Gettinger, 14 Abb. Pr. 109. The sheriff may defend his possession by showing that the assignment is fraudulent before the creditor has obtained judgment and exe- cution. Lux V. Damidson, 63 Supm. Ct. (56 Hun), 345. So far as Deutsch v. Reilly (57 How. Pr. 75) asserts, any other rule is not consistent with the decisions in the Court of Appeals. See Ca/rr v. Yan Hoesen, supra, p. 318. But the sheriff, ander the warrant, cannot maintain an action to set aside the assign- 320 GENERAL ASSIGNMENTS. [CH. XT. ment as fraudulent. That can be done only by a judgment- creditor. The distinction between the right of the sheriff under an attachment to attack the validity of the assignment by way of defense when his possession of property is attacked,, and his want of power to set up the same invalidity as an affirmative cause of action to set aside the assignment, is well settled. Thiir- her V. Blcmch, 50 JST. Y. 80 ; Castle v. Leiois, 78 N. Y. 131 ; Anthony v. Wood, 96 JST. T. 180 ; s. c. 19 Weekly Dig. 177 ; Bowe V. Arnold, 38 Supm. Ct. (31 Hun), 256 ; Grady v. Boive, 11 Daly, 259 ; s. c. 16 Weekly Dig. 136. But as to the limita- tion on this rule in actions to preserve the fund from dissipa- tion until judgments can be obtained, see § 256. As to choses in action a special rule prevails. Such property after it has been assigned cannot be attached by the sheriff as the property of the assignor. It can be attached only when the legal title is in the attachment debtor ; when the title has passed to the assignee, since the property itself is intangible and inca- pable of manual possession, the sheriff can acquire no title to such choses in action under the attachment and no lien thereon. JJess V. Hess, 117 N. Y. 306 ; Throop Grain Cleaner Co. v. Smith, 110 N. Y. 83 ; Thurher v. Blanck, 50 JST. Y. 80 ; Castle V. Lewis, 78 N. Y. 131 ; Smith v. Longmire, 31 Supm. Ct. (24 Hun), 257 ; Bowe v. Arnold, 38 Supm. Ct. (31 Hun), 256 ; Carr v. Van Eoesen, 33 Supm. Ct. (26 Hun), 316. And where the assigned property has been sold by the assignee, and its identity gone, the proceeds cannot be attached or levied upon by the sheriff, as the debtor's property. MoAllaster v. Bailey, 127 N. Y. 583 ; Lawrence v. Baoil' of the Eepublic, 35 N. Y. 320 ; Matter of True, 4 Abb. N. C. 90 ; Lanning v. Streeter, 67 Barb. 33 ; Cnmrpbell v. Erie By. Co. 46 Id. 540 ; Greenleaf v. Munford, 50 Id. 543 ; s. c. 35 How. Pr. 148 ; McEkcain v. Willis, 9 Wend. 548, 569. In such a case the avails of the assigned property are held by the assignee as trustee for the cred- itors of the assignor, and can be reached only by an action in the nature of a creditor's bill, v/hich a sheriff cannot maintain. John- son, J., in Lanning v. Streeter, supra, 44. In Nassau Bank v. Yandes, 51 Supm. Ct. (44 Hun), 55, it was held that an assignment executed in Indiana was operative to transfer an indebtedness due to the assignors in this State, and § 256. J PROCEEDINGS BY ATTACHMENT. 321 that such indebtedness could not be attached here. The rule is recognized that ev^en if the assignment was fraudulent the title to a chose in action passes to the assignee and an attachment can- not be levied on such assigned chose in action at the instance of a creditor of the assignor. An attachment regularly issued, although afterward set aside, may be pleaded by the sheriff as a justification to a taking under it. Day V. Bad, 87 N. Y. 56 ; Iless v. Hess, 117 N. Y. 306 ; Lux V. Damdson, 63 Supm. Ct. (56 Hun), 345. But if, after the attachment has been vacated, the attached property is de- manded, it is retained, the sheriff will be liable for a wrongful detention. See Bowe v. WilMns, 1U6 N. Y. 322 ; rev'g 1 How. Pr. K S. 21. Where several processes are issued at successive times it seems that the plaintiff in the first process may be liable for the whole value of the goods seized, but subsequent plaintiffs and their indemnitors will be liable onlj^ for such sum as can be shown to be the value remaining after the preceding seizures have been deducted. Posthoff v. Sohreiber, 54 Supm. Ct. (47 Hun), 593. See Posthoff v. Bauendahl, 50 Supm. Ct. (^43 Hun), 570. When property has been levied upon under a warrant of at- tachment which is afterward vacated and the defendant then exe- cutes a general assignment and the order vacating the attachment is reversed on appeal, the attachment is not received as against the assigned property. Pack v. Gilbert, 124 N. Y. 612. § 256. Proceedings by creditors based on attachment. — It not infrequently happens that property is seized by the sheriff under confessed judgments and judgments suffered by default, which there is reason to believe are fraudulent. These may be followed by an assignment which is likewise open to attack. Cred- itors who desire to test the validity of the judgments and of the assignment may not have been able to obtain judgments, and it may be impossible for them to do so before the property of the debtors is dissipated by sheriff's sales under the confessed judg- ments. The question has arisen whether creditors who under such circumstances procure attachments on the debtor's property can resort to an action in equity to restrain the sheriff's sales, until the vahdity of the judgments is determined. The cases 21 322 GENERAL ASSIGNMENTS. [CH. XT. bearing upon this inquiry are Bates v. Plonshy, 35 Supm. Ct. (28 Hun), 112 ; Bowe v. Arnold, 38 Supra. Ct. (31 Hun), 256 ; Keller v. Pai/ne, 22 Abb. N. C. 352, note ; Tannenbaum v. Boss- wog, 22 Abb. N. C. 346 ; and People ex rel. Cauffman v. Van Bv,- ren, 136 N. T. 252. The first of these cases was founded upon facts similar to those above supposed. Executions upon confessed judgments had been levied upon tangible property. These were followed by a general assignment. The plaintiff obtained an at- tachment and levied upon the property taken under the judg- ments, and then brought action to restrain the sale and disposi- tion of the property, until the validity of the confessed judgments and assignment could be determined. The case came up on ap- peal from an order denying a motion to vacate a preliminary in- junction, and the right to the injunction was affirmed. In Bmre V. Arnold, 38 Supm. Ct. (31 Hun), 256, it was held that an action could not be maintained by an attaching creditor (and the sherifE) to set aside an assignment for creditors made by the debtor on the ground that it was brought for the protection and enforcement of the lien obtained under the attachment. The court distinguished Bates v. Plonalxy (35 Supm. Ct. [28 Hun] 112), upon the ground that that was an action in e£Eect brought to prevent the distribution of the proceeds of the property until the conflicting rights of different claimants could be settled and a lawful distribution be made. But an action to determine the rights of parties to the proceeds of property fraudulently dis- posed of as between a creditor and the fraudulent transferee is in substance an action to set aside the fraudulent transfer. Prob- ably Bowe V. Arnold and Bates v. Plonxky cannot be recon- ciled unless it be upon the theory suggested in Tannenbaum v. Rosswog, that Bowe v. Arnold went upon the ground that the attachment had been levied upon equitable assets, which if they have been fraudulently assigned the sheriff could not in any event reach under a warrant of attachment. Throop Grain Cleaner Co. v. /Smith, 110 N. Y. 83 ; Anthony v. Wood, 96 Id. 180. Keeler v. Payne, supra, was an appeal from an injunc- tion order in a case similar upon its facts to Bates v. Plonsky, and the order was affirmed. The action was to have the confessed judgments and the assignment declared void and to enforce the priority of the claims of the attachment creditors. § 256.] PROCEEDINGS BY CREDITOR ON ATTACHMENT. 323 In Tcmnenbmim v. Rosswog, supra, the action was brought by an attaching creditor to restrain the sheriff and prior judg- ment creditors from disposing of the property subsequently levied upon and a preliminary injunction was sustained. The question was indirectly before the Court of Appeals in People ex rel. Cauffman v. Van Buren, supra. That was a pro- ceeding to punish the respondent for contempt. It appeared' that a failing debtor confessed judgments which the relator be- lieved to be fraudulent. He thereupon obtained an attachment which was levied upon the property seized under execution upon the confessed judgment. The relator thereupon brought suit alleging the fraudulent character of the confessed judgments, and procured an injunction order restraining the sale under exe- cution. The sheriff, disregarding the injunction, proceeded ■nnth the sale, and for this act as a violation of the injunction order he was adjudged guilty of contempt, and this adjudication was affirmed by a divided court. It will be observed that the question we are discussing came up in that case in such a manner that this adjudication cannot be regarded as conclusive. Unless the court was absolutely without jurisdiction of the subject matter, the defendant was bound to obey the injunction order. But it may be that the court, although not so absolutely without jurisdiction of the sub- ject matter as to render its proceedings nugatory, may neverthe- less decline to exercise its jurisdiction when it appears as an affirmative defense in the action itself that essential facts are wanting. HolUns v. Brierfield O. (& I. Co., 150 U. S. 371, 380. The necessity for the relief administered in the cases above cited, however, seems likely to produce a recognized innovation upon the general rule that only creditors who have reduced their claims to judgments can maintain actions to test the validity of previous fraudulent transfer by their debtor by permitting at- taching creditors to at least enjoin the sale of property or the dis- tribution of the proceeds under judgments against the debtor, when the fraudulent character of such judgments is made to ap- pear. In the case of National Pa/rk Bam,h v. Ooddard, 131 N. Y. 494, it was held that an attaching creditor might maintain an action for equitable relief when a failing firm by false repre- 324 GENERAL ASSIGNMENTS. [CH. XV. sentations had obtained goods from many creditors which they had commingled in the manufacture of clothing. Each creditor under the principle of Sihhury v. MoCoon, 3 N. Y. 379, seized npon replevin such of the manufactured articles containing any portion of his goods as he could secure. In this way the whole stock was taken from the attaching creditor who brought the action to procure a determination to the conflicting claims to the goods. § 257. Fraudulent assignment as ground for arrest in civil action. — The fact that one member of a firm with knowl- edge of its insolvency has paid certain of his individual debts out of the firm's property is not such evidence of an intent to de- fraud creditors as will justify the issuing of a warrant of arrest under the provisions of the Code {Sherrill Hoper Air Eng. Co. v. Hai'wood, 37 Supm. Ct. [30 Hun], 9), but where it appeared in addition to such payments from firm property, that there were other suspicious circumstances, such as a statement showing a large surplus of assets made to a commercial agency shortly be- fore the failure to induce credit, unusually large sales of mer- chandise at auction and confessions of judgments for large amounts, these circumstances were held to be such as to justify a finding of a fraudulent intent in making the assignment as would support an order of arrest. Hinch v. Dessar, 24 Week. Dig. 500. In Untermeyer v. Rutter, 33 Supm. Ct. (26 Hun), 147, where it appeared that the debtor having. made a general assign- ment, concealed and withheld part of the assets from the assignee, and upon this ground an order of arrest was obtained by a cred- itor, it was held that the fact that the assignee had a cause of action to recover the concealed assets furnished no reason why the order of arrest should be vacated. See McButt v. Hirsch, 4 Abb. Pr. 441. § 258. Proceedings by execution. — Leviable property, wheth- er real or personal, which has been transferred by the debtor in fraud of creditors, may, notwithstanding such transfer, be levied upon and sold under execution by a judgment creditor. Smith v. Reid, 134 N". T. 568 ; Cliautauqua Go. Bcmk v. Risley, 19 N. T. § 259.] PROCEEDINGS BY EXECUTION". 325 369. The purchaser of real property may impeach the convey- ance of land in a suit at law to recover possession, or if he can gain possession he can defend the title thus acquired against the fraudulent grantee or those claiming under him. Chautauqua Go. JBamh v. Eisley, 19 N. Y. 369 ; Bergen v. Carman, 79 IST. Y. 146, 153. The theory upon which relief is granted to creditors is that as between tlie debtor making the conveyance and his cred- itors the fraudulent grantee takes by it no title. Nat. Trades- men's Bamk v. Wetmore, 124 N. Y. 241, 252. If the property is personal the sherifif may be compelled to levy and sell notwith- standing the transfer if he is indemnified by the judgment creditor as required by law. (Code of Civ. Pro., § 1419.) The remedy of the claimant under the transfer is then by trespass or replevin. Equity will not enjoin a levy and sale of the assigned property by a judgment creditor at the suit of the assignee be- cause the remedy at law is ample. Chittenden v. Da/oidson, 52 Super. Ot. (20 J. & S.) 421. Where an assignment is void as against a statute, and where a creditor takes the property on execution, which that assignment intended to convey, he takes no residuum or equitable interest of the assignors, but he takes property belonging to his debtors, the title of which never passed from them to their assignees, and though the effect of this is to give one of the creditors an entire satisfaction of his debt, while others equally meritorious may go either wholly or partially unpaid, yet the law serves those who are vigilant, and the creditor who has first obtained judgment and execution reaps the fruits of his vigilance. Austin v. Bell, 20 Johns. 442 ; MoConnell v. Sherwood, 84 N. Y. 522. § 259. Assignee's action to establish the assignment. — The amendments to the Code of Civil Procedure which require the substitution of the indemnitors upon the bonds given to the sheriff by attachment and execution creditors in the place of the sheriff in actions brought by claimants to recover the prop- erty levied upon by the sheriff or damages for its seizure or detention have given rise to diSiculties in apportioning the dam- ages against different classes of indemnitors when various attach- ments and executions have been levied at different times. In- stances are found in Fosthoff v. Sch/reiher, 54 Supm. Ot. (4Y Hun), 326 GENEKAL ASSIGNMENTS. [CH. XV. 593, and Posthoffy. Bauendahl, 50 Supm. Ct. (43 Hun), 570 ; Dyett V. Hymcm, 37 State R. 251. Upon the ground that the assignee's remedy at law by reason of this legishition was ren- dered inadequate when the assigned property is thus taken nnder attacliments or executions by different creditors at different times, the court in Newcombe v. Ii-cing Nat. Banl:, 58 Supm. Ct. (51 Hun), 220 ; s. o. 23 Abb. N. C. 3, note (where the com- plaint in the action is set out), entertained an action to establish the assignment and enjoined the creditors, upon receiving proper security, from levying executions upon the assigned property dur- ing the pendency of the action. This case is distinguished from Chittenden v. Bmidson, 52 Super. Ct. (20 J. & S.) 421 only by reason of the provisions of the code referred to. § 260. Proceedings supplementary to execution. — The code affords the judgment creditor opportunity for the examination of the judgment debtor as to the disposition of his property by as- signment or otherwise by proceedings supplementary to execution. The fact that the debtor has made a general assignment is no ground for limiting the examination to property acquired after the assignment. It is competent on such proceeding to examine into the good faith and validity of the assignment. Schneider v. Altman, 8 C. P. 242 ; Wilson Bros. W. da T. Co. v. Daggett, 9 Id. 408 ; SeUigman v. Walhich, 67 How. Pr. 514 ; Lathrop v. Clapp, 40 N. y. 328. The fact that a judgment-creditor has commenced a creditor's action to set aside the assignment is no reason why he may not also prosecute proceedings supplementary to execution and therein examine both the assignor and the as- signee as to matters relating to the assignment. Matter of S!cUe, 59 Supm. Ct. (52 Hun), 527 ; Sohloss v. Wallach, 16 Abb. N. C. 319, note ; rev'd, 45 Supm. Ct. (38 Hun), 638, 102 JSI. Y. 683. "When the assignee is called as a witness in siich proceedings he may be required by subpoena duces tecum to pro- duce tlie books of account of the assignor. Matter of Siclde, supra. The construction which has been given to the sections of the General Assignment Act relating to the examination of the as- signor and witnesses limiting such examination to inquiries in aid of the assignment and not in hostility to it (see post, Chap. § 261.] PROCEEDINGS BY CREDITORS IN EQUITY. 327 XXI.), confine creditors who are proceeding to attack the assign- ment as fraudulent in the judicial examination of the debtor and other persons connected with the supposed fraud to proceedings supplementary to execution and to the examination of parties be- fore trial under Oode, § 870 et seq. But these proceedings aiiord ample facilities for the examination of the assignor, the assignee and other persons, and for the production and discovery of books and papers. An inspection of the assignor's books may also in a proper case be obtained under Code Civ. Pro. §§ 803, 804. See post, § 269. A receiver of the debtor's property appointed in supplementary proceedings acquires a right of action by the Act of 1858 (Laws of 18.58, Chap. 314, cmte, § 156) to set aside previous fraudu- lent transfers made by the debtor, but he has no title or lien in respect to such property until the commencement of his suit. Bostwick V. Menck, 40 N. Y. 383 ; Metcalf v. Del Voile, 71 Supm. Ct. (64 Hun), 245 ; see post, Chap. XXI. § 261. Proceedings by creditors in equity. — The rules which in general apply to actions in equity brought by creditors to reach the property of their debtor fraudulently conveyed, are those which apply to actions to set aside fraudulent assignments. 'None but judgment-creditors, with the exceptions hereafter mentioned, can maintain such an action. A mere creditor at large cannot bring an action to reach property of his debtor which has been fraudulently assigned. FrotJivnghwrn v. Hoden- pyl, 135 N. Y. 630 ; Gates v. AUen, 149 U. S. 451 ; South- ard V. Benner, 72 N. Y. 424 ; Geery v. Geery, 63 IST. Y. 252 ; MsUs V. Wilcox, 67 Id. 264 ; Adeev. Bigler, 81 Id. 349 ; Neu- stadt V. Joel, 2 Duer, 530 ; affi'd, as Heubens v. Joel, 13 N". Y. 488 ; Andrews v. Bwramt, 18 N. Y. 496 ; Coofe v. Bowles, 18 Abb. Pr. 442 ; s. c. 28 How. Pr. 10 ; s. c. 42 Barb. 87 ; Wil- letts V. Ya/rideriburgh, 34 Barb. 424 ; Crojpsey v. McKinney, 30 Barb. 47 ; Hastings v. Belknap, 1 Den. 190. There are two forms of action to which a judgment-creditor may resort.' If, having issued an execution upon his judgment. ' There are two classes of cases where a plaiutifE is permitted to come into a court of equity for relief, after he has proceeded to j udgment and execu- 328 GENERAL ASSIGNMENTS. [CH. XV. a valid levy has been made thereon upon real or personal prop- erty of the debtor, subject to levy, which has been fraudulently assigned by the debtor, the creditor may bring an action in aid of the execution to enforce the lien of his execution and to re- move the obstruction to his legal remedy occasioned by the fraudu- lent assignment. BecTx. v. Burdett, 1 Paige, 305, 308 ; Mohawk Bank Y. Atwater, 2 Id. 54 ; Macauley v. Smith, 132 N. Y. 524, 532 ; Frost v. Mott, 34 N. Y. 253 ; Chautauqua Co. Bank v. Wlu'te, 6 N. Y. 236, 252 ; Bishop v. Balsey, 3 Abb. Pr. 400 ; McElwain v. Willis, 9 "Wend. 548 ; Crippen v. Hudson, 13 N. Y. 161, 166 ; Farshall v. Tillou, 13 How. Pr. 7 ; Shaw v. Dwight, 27 N". Y. 244, 247 ; Brinkerhoff v. Brown, 4 Johns. Ch. 671 ; see Fox v. Moyer, 54 N. Y. 125 ; Fayne y. Sheldon, 63 Barb. 169, 173 ; Heye v. Bolles, 33 How. Pr. 266. In Foyer Wheel Co. v. Fielding, 38 Supm. Ct. (31 Hun), 274, where the action was to set aside several conveyances of real estate, including a general assignment, and the execution was outstanding at the time of the commencement of the action, but was returned unsatisfied before the trial, it was held that such return did not prevent the maintenance of the action. Though the judgment was reversed in the Court of Appeals (101 N. Y. 504), the ruling upon this point in the court below was approved. With regard to personal property subject to levy it seems to have been thought, in some cases, that an execution outstanding was essential to enable the judgment-creditor to maintain an action to set aside a transfer of the property as fraudulent. The tion at law without obtaining satisfaction of bis debt. In one case tlie issu- ing of the execution gives to the plaintiff a lien upon the property, but he is compelled to come here for the purpose of removing some obstruction fraudu- lently or inequitably interposed to prevent a sale on the execution. In the other, the plaintiff comes here to obtain satisfaction of his debt out of prop- erty of the defendant which cannot be reached by execution at law. In the latter case, his right to relief here depends upon the fact of his having ex- hausted his legal remedies without being able to obtain satisfaction of his judgment. In the first case the plaintifl may come into this court for relief immediately after he has obtained a lien upon the property by the issuing of an execution to the sherifE of the county where the same is situated ; and the obstruction being removed, he may proceed to enforce the execution by a sale of the property, although an actual levy is probably necessary to enable him to hold the property against other execution creditors or boTia fide pur- chasers. Chan. Walworth, in Beck v. Burdett, 1 Paige, 305, 308. § 261 ] PROCEEDINGS BY CREDITORS IN EQUITY. 329 reason of the rule has been said to be that the equitable aid of the court to set aside such conveyance can be invoked only by one having a lien on the property, and that the lien on personal property would be lost by the return of the execution. See re- marks of Daly, C. J., in Buswell v. Lincka, 8 Daly, 518, 520. But the principle of the decision in the case of Adsit v. Butler (87 N. Y. 585), which was a case where a transfer of real estate was attacked by a judgment-creditor, applies equally to personal property subject to levy. A creditor has his option either to proceed by creditor's bill after return of execution unsatisfied, or to bring his action in aid of execution, in which latter case the execution must remain outstanding. Ocean Nat. JBanh v. Olcott, 46 1SI. Y. 12. A judgment-creditor's action under the Code of Civil Proced- ure, § 1871, can be maintained only when the execution has been returned wholly or in part unsatisfied. The provisions of the Code are not construed as limiting the general equity power of the court in creditors' suits. Wat. Tradesmen's Bank v. Wetmore, 124: N. Y. 241, 248 ; Hart v. Alfyright, 28 Abb. N. C. 74. To the maintenance of a creditor's suit in equity apart from statute the existence of judgment or of judgment and execution is necessary first as adjudicating and definitely establishing the legal demand, and second as exhausting the legal remedy. Gates v. Allen, 149 U. S. 451, 457 ; HolUns v. Brierfield Coal & I. Co., 150 U. S. 371. The principle upon which courts of equity act in such cases is stated by Mr. Justice Field in Scott v. JVeely, 140 IT. S. 106, 113, as follows : " In all cases where a court of equity interferes to aid the enforcement of a remedy at law, there must be an acknowledged debt, or one established by a judgment rendered, accompanied by a right to the appropriation of the property of the debtor for its payment, or, to speak with greater accuracy, there must be, in addition to such acknowledged and established debt, an interest in the property or a lien thereon created by con- tract or by some distinct legal proceeding." See also Bacon v. Ha/rria, 62 Fed. E. 99, 102. The necessity for a judgment under the Chancery practice has limitations which will be con- sidered in the succeeding section. It has been said that when the subject sought to be reached is choses in action an execution returned is necessary by the ex- 3B0 GENERAL ASSIGNMENTS. [cH. XV. press provision of the statute. Code of Civ. Pro. § 1871 ; 2 R. S. 174 ; Bishop v. Ealsey, 3 Abb. Pr. 400 ; Shaw v. Dwight, 27 N. T. 244, 249 ; Del Voile v. Byland, 40 State E. 924 ; Clark- son V. I>e Peyster, 3 Paige, 320 ; Adsit v. Butler, 87 N". Y. 585 ; Fox V. Moyer, 54 Id. 125. The filing of the creditor's bill gives the creditor a lien upon all equitable assets. Broion v. Nichols, 42 N. Y. 26 ; Clarh v. Brockway, 1 Abb. Bee. 351. Where the property sought to be reached is real estate it has been sometimes thought that since a judgment is a lien upon such property it was not necessary that an execution should have been issued. It seems to be now definitely settled by the case of Adsit V. Butler (87 N. Y. 585), that in an action to set aside a fraudulent conveyance of realty, the complaint must allege the issuance of an execution and its return unsatisfied, or the action must be brought in aid of an execution then outstanding. See Fox V. Moyer, 54 N". Y. 125 ; Orippen v. Hudson, 13 Id. 161 ; Shaw V. Dwight, 27 Id. 244 ; Easwell v. Lincks, 87 N. Y. 637. It will be observed, therefore, that the remedy of judgment- creditors in equity is threefold. 1. As against leviable assets he may maintain an action in aid of the execution. 2. He may maintain an action under the Code for discovery and for the sat- isfaction of his judgment out of property of the judgment- debtor, so discovered or reached. 3. He may proceed as in a creditor's action under the inherent powers of a court of equity. § 262. Proceedings by creditor's suit. — The distinction be- tween a judgment-creditor's action under the Code (§ 1871) and a creditor's suit in equity is not clearly defined. The sections of the Code have no reference to actions brought in aid of the exe- cution. Easton Nat. Bk. v. Buffalo Cheinical Works, 55 Supm. Ct. (48 Hun), 557. That is apparent, since the Code action can- not be brought until the execution has been returned. Neither does the Code in express terms authorize a creditor's action to reach property fraudulently disposed of by the debtor. It author- izes an action " to compel the discovery of any thing in action, or other property belonging to the judgment-debtor, and of any money, thing in action, or other property due to him, or held in trust for him ; to prevent the transfer thereof, or the payment or § 263. J ceeditoe's suit. 331 delivery thereof, to him, or to any other person ; and to procure satisfaction of the plaintiii's demand" (Code, § 1871). Whether this language includes the right to recover property fraudulently transferred is not perhaps a matter of practical importance, since such an action may be maintained under the general equity power of the court, which, as we have seen, is not limited by the lan- guage of the Code. In Hari v. Albright, 28 Abb. N. C. 74, which was an action for a discovery of certain book accounts alleged to have been concealed and fraudulently transferred, it was held that the com- plaint stated a sufiBcient cause of action under the old practice, ,and therefore was not open to demurrer even though it did not state a cause of action under the Code. Whether the action is regarded as being brought under the provisions of the Code or by virtue of the inherent equity power of the court, it is alike essential that the plaintiff should first have exhausted his remedy at law, and that he should have a judgment upon which execution has been issued and returned unsatisfied.' Frothingham v. Sodenpyl, 135 N. Y. 630 ; Adsit v. Butler, 87 ]Sr. Y. 585 ; Andrews v. Burant, 18 N. Y. 496 ; Estes v. Wilcox, 67 K. Y. 254 ; McCartney v. Bostvnch, 32 N. Y. 53 ; Adee v. Bigler, 81 N. Y. 349 ; Maoauley v. Smith, 132 N. Y. 524, 532 ; ICerr v. DiMine, 67 Supm. Ct. (60 Hun), 315 ; Knauth V. Bassett, 34 Barb. 31 ; Wilson v. Forsyth, 24 Barb. 105 ; Hastings v. Belknap, 1 Den. 190 ; Willetts v. Yanden- hurgh, 34 Barb. 424, and cases cited, ante, § 261. In Nat. Tradesmen's Bank v. Wetmo7'e, 124 N. Y. 241, 248, it is said, that " it has become the settled will in this State not to dispense with those preliminary proceedings at law, although it may be made to appear by evidence that no benefit could result to the creditor from them." § 263. Creditor's suit — Instances in which judgment and execution are not essential. — There are exceptions in the ap- plication of this rule, one of which was presented in the case last ' In the federal courts of otherwise competent jurisdiction, a creditor's suit may be based upon a judgment recovered in a state court, but only where the execution has been issued and returned within the territorial jurisdiction of the court. Bacon v. Harris, 63 Fed. R. 99. 332 GENERAL ASSIGNMENTS. [cH. XV. cited. In that case it was held that where the debtor, being a non-resident, had fraudulently conveyed real property situated in this State, and afterward an assignee of his estate had been ap- pointed in insolvency proceedings in Connecticut, who acquired no right of action to the property in this State, and the debtor afterward died, and actions against his personal representations were not permitted by the laws of that State, a creditor might maintain an action in this State to reach the property fraudu- lently conveyed without judgment and execution, for the reason that the recovery of such judgment was impossible. Creditors of a limited partnership stand in a more favorable position than creditors generally, since they may file a bill in equity to restrain insolvent partners from disposing of the part- nership property contrary to law, and for the appointment of a receiver. Van Alstyne v. Cook, 25 N. Y. 489 ; Innes v. Lan- sing, 7 Paige, 583; Whitcomb v. Fowle, 7 Abb. N. C. 295 ; 8. o. 10 Daly, 23 ; Hardt v. Levy, 79 Supm. Ct. (72 Hun), 225. A receiver appointed in supplementary proceedings may, after perfecting his appointment, maintain an action in his own name to set aside an assignment of real and personal property made by a judgment-debtor, on the ground of fraud, without having first received from such debtor an assignment to himself as such re- ceiver. Porter v. Williams, 9 IST. Y. 142 ; Bostwick v. Menck, 40 N. Y. 383. The appointment of the receiver does not vest him with the legal title to the property so assigned, but only with the right of action which a judgment-creditor would have to attack the as- signment ; and the assignment will be set aside only so far as to enforce the payment of the judgment upon which he was ap- pointed receiver, and the expenses of that proceeding and costs. Bostwick V. Menck, 40 N. Y. 383 ; Olney v. Tanner, 10 Fed. E. 101, 113 ; affi'd, 18 Id. 636 ; Metcalfv. Del Valle, 71 Supm. Ct. (64 Hun), 245. An assignee in bankruptcy may maintain an action to set aside a conveyance as fraudulent without the necessity of a previous judgment and execution against the debtor who made it, as is required in the case of an individual creditor ; and although none of the creditors have obtained a specific lien or have a standing in court to attack the conveyance. Southard v. Benner, 72 §264. J creditor's STTIT — PARTIES. 333 N. Y. 424. As to the extent and limit of power of an assignee in bankruptcy to bring actions to set aside fraudulent transfers, see Wait on Fraud. Conv., 2d ed., § 114. An apparent exception to the rule that a creditor at large can- not maintain a creditor's bill arises in those cases in which the creditors occupy the position of cestui que trust, and the fiduciary being clothed with statutory power to maintain such actions for their benefit, refuses or neglects to do so. Spelman v. Freed- man, 130 N. Y. 421, affi'g 61 Supm. Ct. (54 Hun), 409; Har- vey V. MGDonnell, 113 N. Y. 526 ; Lowery v. Clinion, 39 Supm. Ct. (32 Hun), 267 ; Swift v. Hart, 42 Supm. Ct. (35 Hun), 129 ; Riessner v. Oohn, 22 Abb. N. C. 312 ; Bate v. Graham, 11 N. Y. 23Y. In such cases the creditor in support of the trust and in aid of the assignment or several judgment creditors hold- ing distinct and several judgments may maintain an action. White'' s BanJe v. Farthing, 101 N. Y. 344 ; Looinis v. Brown, 16 Barb. 325, 331, and cases cited ; Brinkerhoff v. Brown, 6 John. Ch. 139 ; Fellows v. Fellows, U Cow. 682 ; Fish v. How- land, 1 Paige, 20 ; Eglerts v. Wood, 3 Id. 517. By the amendment to Act of 1858 (Laws of 1858, c. 314 ; laws of 1889, c. 487, quoted in full, am,te, § 156) a general creditor of a deceased debtor or having a claim exceeding $100 may maintain for the joint interest of all the creditors to set aside fraudulent conveyances and transfers made by the deceased debtor. In such a case judgment and execution are not necessary, but the creditor bringing the action secures no priority. The complaint in such cases must set out a good cause of action by the creditor, and it must also show that the action is being prosecuted for the benefit of all creditors. Louis v. Belgard, 43 State K. 766. § 264. Creditor's suit — Parties. — The action may be brought by the plaintiff on behalf of himself and all others similarly situ- ated. Brownson v. Oifford, 8 How. Pr. 389, 395 ; Habicht v. Peinberton, 4 Sandf. 657 ; Hammond v. Hudson Ri/o. I. & M. Co. 20 Barb. 378. But the action may be, and more often is, brought by the creditor simply in his own behalf. He is under no obligation to sue on behalf of all the other creditors. Hendricks v. Robin- 334 GENERAL ASSIGNMENTS. [CH. XV. son, 2 John. Ch. 283 ; Ednneston v. Lyde, 1 Paige, 687 ; Par- melee V. Egan, 7 Id. 610 ; Reubens v. Joel, 13 JST. Y. 4SS. The assignors are necessary parties. Lawrence v. Banli of EepuUic, 35 N". Y. 320 ; Hvhlell v. Jferck. Nat. Bk., 4-9 Supin. Ct. (42 Hun), 200 ; Miller v. Hall, 40 Snper. Ct. (S J. & S.), 262 ; affi'd, 70 N. Y. 250. So, if the assignor dies during the pendency of the action, it must be revived against his representa- tives. Edwards v. Woodrvff, 90 N. Y. 396. The objection that there is a defect of parties by reason of the failure to make the assignor a party defendant is waived if not taken by demurrer or answer. Hurlhert v. Dean, 2 Abb. Dee. 428 ; s. c. 2 Keyes 97. Preferred creditors may be made parties, and when their pref- erences are attacked as invalid they are proper parties. Genesee Co. Bk. V. Bank of Batavia, 50 Supm. Ct. (43 Hun), 295, and though all the creditors are nominally represented by the assignee, yet they may be allowed to intervene. Chandler v. Poioers, 32 Supm. Ct. (25 Hun), 445 ; Davies v. Eish, 54 Supm. Ct. (47 Hun), 314. § 265. Creditor's suit — The complaint. — The material alle- gations of the complaint in an action by a creditor to set aside an assignment as fraudulent, are (1) the recovery of judgment, (2) the return of execution [Adsit v. Butler, 87 N. Y. 585), (3) the conveyance or assignment complained of, and (4) the fact that the assignment was made with the intent to hinder, delay and defraud creditors. It is not necessary to allege and set forth in the complaint the specific acts of fraud or facts showing a fraudu- lent intent upon which the plaintiff relies to establish the fraudu- lent intent when the fraud appears on the face of the instrument. Wilson V. Eorsyth, 24 Barb. 105 ; Hastings v. Thurston, 18 How. Pr. 530 ; s. 0. 10 Abb. Pr. 418 ; see Mott v. Dunn, 10 IIow. Pr. 225 ; Jessup v. Hulse, 29 Barb. 539. And this is the rule, whether the fraud is one evidenced by provisions on the face of the assignment or by facts extrinsic to the instrument. Pittsfield Nat. Bk. v. Tailer, 67 Supm. Ct. (60 Hun), 130 ; Durant v. Pierson, 29 State E. 510 ; Nat. Union Bank v. Reed, 27 Abb. N. C. 5 ; and see note as to the distinction between pleading fraud and intent to defraud. If the facts from which a fraudulent intent constructively ap- pear are set out in the complaint it will not be dismissed because §265.] creditor's SUIT— coMPLAiiirT. 335 it contains no allegation of fraudulent intent, even tbough it be conceded that the parties intended no fraud. If the facts lead to the conclusion that the assignment is fraudulent in law, then the conclusion is also pleaded. Stafford v. Merrill, 69 Supm. Ot. (62 Hun), 144. The judgment-creditor may in the same action attack not only the assignment, but all other fraudulent conveyances made by the debtor, and if he succeeds in proving that the general as- signment is void because of fraud, then the question of the fraudulent character of the previous conveyance can be determined in the action. Loos v. Wilkinson, 110 N. Y. 195 ; Chandler V. Powers, 9 State R. 169. Higgins v. Crichton, 11 Daly, 114, so far as it holds to the contrary must be regarded as overruled. Bat if the judgment- creditor in such an action fails in his attack upon the assignment he must also fail in the effort to show that the previous, conveyances were fraudulent, for the reason that the right of action as against those conveyances will then be foiind to be in the assignee. Cutter v. Hume, 43 State E.. 242.' ' Attention should perhaps be directed to certain cases in which there has been presented the necessity of alleging and proving that the fraudulent con- veyance complained of left the debtor iasolvent and without sufficient prop- erty to pay his existing debts. See Kwin v. Larkin, 131 N. Y. 300 ; Madera v. Whallon, 81 Supm. Ct. (74 Hun), 373 ; Fuller v. Brown, 83 Supm. Ct. (76 Hun), 557. It will be observed that none of these were actions relating to general assignments. Indeed the question can hardly arise in an action simply to set aside a general assignment the effect of which is to place all a debtor's prop- erty beyond the reach of legal proceedings by creditors. It might arise, however, in an action brought to set aside previous fraudulent transfers and also the assignment. The necessity of such averment is in any event confined to actions by subsequent creditors. As to creditors existing at the time of the transfer, an intent to hinder, defraud, and delay, whether the debtor be sol- vent or insolvent, will defeat the-conveyance. Cole v. Tyler, 65 N. Y. 73, 78. Seeparpenter v. Moe, ION. Y. 227. But whatever may be the necessity of proving that the conveyance left the debtor insolvent, the fraudulent intent is the ultimate fact, and evidence of insolvency, if it be necessary to establish that fact, is admissible under the general allegation. Puller v. Brown, 83 Supm. Ct. (76 Hun), 557. When the property fraudulently conveyed is destroyed before it comes into the hands of the assignee, the judgment-creditor has no cause of action against the assignee. PUteel v. Bchulhof, 59 Super. Ct. (37 J. & S.), 88 ; but if the property is still in existence, even though it has not been delivered to the assignee, and he claims nothing under it, the creditor may have the appar- ent conveyance set aside as an obstacle to the collection of his debt. Qasper v. Bennett, 12 How. Pr. 307. 336 G-ENEEAL ASSIGNMENTS. [oH. XV. § 266. Creditor's action— Bill of particulars.— The Code of Civil Procedure (§ 531) provides that " the court may, in any case, direct a bill of the particulars of the claim of either party to be delivered to the adverse party." The court undoubtedly has the power under the warrant of this provision to compel the plaintiff to furnish the particulars of the facts upon which he founds the charge of fraudulent intent. Claflin v. Smith, 13 Abb. N. C. 205 ; Passavant v. Cantor, 55 Supm. Ct. (iS Hun), 546 ; Fwxon V. BaU, 50 State R. 495. The application is addressed to the discretion of the court, and where the assignee is shown to be in possession of all the facts and the granting of tlie applica- tion will practically have the effect only of confining the plain- tiff to the proof of specific fact, the motion will not be granted. Passavant v. Cantor, supra ; Faxon, v. Pall, supra. § 267. Creditor's action — Defences, previous actions. — It is a defense to an action brought by a judgment-creditor to set aside an assignment that prior to the commencement of the action the whole of the assigned estate had been distributed under a decree of the county court and that the assignee had been dis- charged. McLean v. Prentice, 41 Supm. Ct. (34 Hun), 504. But in Turney v. Van Gclder, 75 Supm. Ct. (68 Hun), 481, where an action for an accounting had been brouglit by one creditor on behalf of himself and others in which notice was given to all creditors to present their claims, but no notice of application for judgment was given to the plaintiff, and the estate distributable among creditors was not more than sufficient to pay the claim of the assignee who was a preferred creditor, it was held that the plaintiff was not barred by tlie judgment from bringing an action to set aside the assignment. But an action for an accounting by one creditor on behalf of himself and all other creditors to which a creditor is made a party by proper notice will preclude him from afterward maintaining an action for an accounting. Kerr v. Blodgett, 48 JST. Y. 62. deepest. Chap. XXVII. Since, as we have already seen, each judgment-creditor is at liberty to bring a separate action to attack the conveyance the recovery of judgment by one judgment-creditor will not preclude subsequent judgments in favor of other creditors. When there are a number of actions pending by different §268.] INJUNCTION AND KECEIVEK. 337 judgment-creditors attacking the same aesigmnent, all involving the same issue, the trial of all but one of the actions may be stayed to await the determination of one trial. Brown v. May, 17 Abb. N. C. 205 ; JST. T., L. E. dh W. B. B. Co. v. Bolvn- son, 15 State E. 237. The defendant may show in defense to the plaintiff's action that the judgment upon which he bases his right of recovery was fraudulently recovered. Bichardson v. Trimble, 45 Supm. Ct. (38 Hun), 409. Wait on Fraud. Conv., 2d ed., § 270. It has been held that in an action by a judgment-creditor against the assignee, the assignor, and the alleged fraudulent mortgagee, to set aside an assignment and chattel mortgage, the assignee cannot set up an affirmative claim that the mortgage was given as part of the assignment, with the intent of creat- ing an excessive preference, and ask for relief that the lien of the mortgage be reduced within the limits of preferences per- mitted by law. Ycm Allen v. Bogers, 5 Misc. 420. § 268. Injunction and receiver. — The court has power in such an action to restrain the transfer of the assigned property by the assignee, and to appoint a receiver. Bloodgoodv. Glarh, 4 Paige, 674 ; Lent v. McQueen, 15 How. Pr. 313 ; Haggarty v. Pittman, 1 Paige, 298 ; Connah v. Sedgwick, 1 Barb. 210 ; Mcmning v. Stern, 1 Abb. N. C. 409 ; Whitcornb v. Fowle, 7 Abb. N. 0. 295 ; s. c. 10 Daly, 23. This power is expressly conferred upon the court by § 1877 of the Code of Civil Pro- cedure. But it is not a matter of course to enjoin the assignee ■from proceeding, and to appoint a receiver. The assigrxee majr be permitted to convert the property into money, while he is enjoined from making any distribution of it until after the determination of the action. Bishop v. Halsey, 3 Abb. Pr. 400. In People^s Ba/iih v. Fa/nclier, 21 N. Y. Supp. 545, a receiver during the pendency of the action was appointed, where it ap- peared that the assignee had participated in the acts which were regarded as showing that the assignment was illegal. When the facts presented on such an application make it appear probable that the assignment will be set aside the appointment is proper. Ihid., Babcoch v. Jones, 69 Supm. Ot. (62 Hun), .565 ; s. c. 17 N. Y. Supp. 67 ; Empire Pav. & ConsPr^n Co. v. Bolinson, 338 GENERAL ASSIGNMENTS. [CH. XV. 33 State R. 897. But a clear case should be presented. Min- sesheimer v. Mayer, 66 How. Pr. 484. Where an injunction is obtained restraining the enforcement of judgments confessed cotemporaneously with and as part of the assignment, the complainant is not required to give a bond for the full amount of the judgment under Code, § 613. The amount of the bond is in discretion of the court. Sweetser v. Smith, 22 Abb. N. 0. 319. Where an action is brought to set aside an assignment for fraud, it is a strong reason against appointing a person receiver of the property assigned, that he was a party to the assignment. Smith V. If. Y. Consolidated Stage Co., 18 Abb. Pr. 419. And where the assignee has been appointed receiver and a judgment is given setting aside the assignment and directing the assignee to account, the receiver will be removed and some other person will be substituted, so that the party to whom and by whom the account is rendered shall not be the same. EicKberg v. Wich- ham, 21 N. Y. Supp. 647. § 269. Creditor's action— Inspection of debtor's books.— An inspection of the books and papers of the assignor may be ob- tained in a judgment-creditor's action under §§ 803, 804 of the Code of Civil Procedure and the rules of court (Rule 14), and it would seem that an inspection of the assignor's books in such an action is almost a matter of right. The insolvent estate is the product of the property of creditors ; the accounts touching the estate are the accounts in reality of their property. This is one of the cases in which the party applying for an inspection has an interest in the very thing of which an inspection is sought, and that circumstance brings the case into analogy with cases of part- nership and principal and agent. Manley v. Bonnet, 11 Abb. N. C. 123 ; Buff^. Hutchinson, 19 W'kly Dig. 20 ; Kelly v. Eckford, 6 Paige, 548 ; Stebhins v. Harmon, 24 Supm. Ct. (17 Hun), 445, in which an inspection is fully allowed. An instance in which such an inspection was allowed and the petition and order will be found in Bundschu v. Simon, 23 N. Y. Supp. 214. § 270. Creditor's action — Trial. — A creditor's action to set aside a general assignment which includes real estate, must be § 271.J ceeditok's action— trial. 339 brought in the county in which the real estate is situated. An offer on the part of the plaintiff to stipulate that he will not at- tempt to reach the real estate, or make any claim of title or in- tent therein, will not defeat a motion to change the venue to the proper county. Wyatt v. Brooks, 49 Snpm. Ct. (42 Hun), 502 ; Sweetser v. Smith, 22 Abb. N. 0. 319, 327. The question of fraudulent intent in a case triable before a jury, must be submitted to the jury if there is ground for op- posite inferences, and a conclnsion either way would not shock the sense of a reasonable man. This rule was applied and a judgment holding an assignment invalid on the direction of the judge at trial term, was reversed where the evidence, although establishing a case of the wrongful withholding of assets from the assignee, was yet held not to be so conclusive as to justify the court in taking the case from the jury. JBagley v. JBowe, 105 N. Y. 171, 179. If the necessary effect of a provision contained in an assignment is to defraud creditor the court may direct the jnry to find the assignment invalid. See ante, § 199. And where the question of fraud is dependent upon evidence extrinsic to the written assignment, the statute declaring the question of fraudulent intent to be one of fact and not of law does not, as now interpreted, interfere with the. prerogative of the court to direct a verdict provided the fraudulent intent is conclusively established on the face of the instrument of transfer or by the uncontradicted verbal evidence. Bulger v. Bosa, 119 N". T. 459, 464 ; Bagley v. Bowe, 105 N. Y. 171 ; Coleman v. Burr, 93 N. Y. 17, 31 ; and if the evidence of fraud is completely rebutted so that a verdict finding the fraud would be set aside the court may direct a verdict accordingly. Prentis Tool cfe 8. Co. v. Schirmer, 136 N. Y. 305 ; Cha/rnlers v. Smith, 67 Supm. Ct. (60 Hun), 248. § 271. Repelling presumptions of fraud by parol evidence. — We have already had occasion to refer to certain cases in which it has been held that directions in an assignment to pay indi- vidual debts out of firm assets may be shown by parol evidence to be innocuous where no such debts in fact existed, or where the obligations were equitably chargeable against the firm (§ 192). In Crooh v. BindsJcopf, 105 ^. Y. 476, the question whether 340 GENEKAL ASSIGNMENTS. [CH. XV. parol evidence was admissible to show that provisions in them- selves indicative of fraud were not fatal to the validity of the as- signment if by reason of the existence of a state of facts they were harmless was raised but not disposed of. Reference was made to Collorrih v. Caldwell, 16 N. Y. 484, where it was held that assignors providing in their assignment for an illegal dis- position of property, are not at liberty in an action to set it aside to show as proof of innocence of fraudulent intent that the as- signed fund was insufficient to satisfy the prior valid provisions of the assignment, and could not, therefore, be affected by the alleged illegal provision, and reference was also made to Turner V. Jaycox, 40 N. T. 470, and Bogert v. Haight, 9 Paige, 297 ; see ante, § 192, where it was held that the presumption of fraud arising from the provisions of an assignment may be repelled by parol evidence. Where, however, the provision has a necessary tendency to injure creditors, the assignor's ignorance of its effect or his mental state cannot change the inevitable consequence of the provision, and the assignment will be invalid. Chambers V. Smith, 67 Supm. Ct. (60 Hun), 248. § 272. Creditor's action — Priority of creditors — Lis pen- dens. — The interest win'eh different judgment-creditors may ac- quire in the assigned estate by commencing proceedings in the nature of creditors' actions and prosecuting them may properly be considered in this connection. The general rule is that dur- ing the pendency of an action, the subject-matter of which is specitic property, an alienation of any part of the property is subject to the final decree. The leading case in this country is Murray v.BuJhin, 1 Johns. Ch. 566, in which Chancellor Kent stated the history of the English decisions down to that time. The doctrine rests upon the necessity for such a rule in order to render the decree of the court effectual. The rule varies some- what in its application to different species of property which may be the subject-matter of the litigation. It varies also in its ap- plication to different classes of persons as to whether they are parties to the suit or third person purchasing with or without notice. The most perplexing questions, however, arise between creditors pursuing their remedies as against the property fraudu- lently transferred. § 273.] creditor's action — priority of creditors. 341 It IB to be observed that the creditor's right to reach the debtor's property is in no true sense an interest in that property ; it is at most only an equitable lien on the property. Pom. Eq. Jur., 2d ed., § 1057, n. § 273. Creditors' suits — Priority as to real estate. — Chan- cellor Kent, in Murray v. Ballou (1 Johns Ch. 566, 576), stated the rule in Courts of Chancery both in England and in this State, previous to the adoption of the Code, as follows : " The established rule is, that a lis pendens, duly prosecuted, and not collusive, is notice to a purchaser so as to effect and bind his interest by the de- cree ; and the lis pendens begins from the service of the subpoena after the bill is filed." This rule required a sufficiently accurate description of the property to give notice to an intending pur- chaser who might examine the bill. The filing of the bill and the service of the subpoena constituted in effect a constructive notice such as is now the result of the filing of a notice of pendency of action under the Code. The Chancery rule was abrogated by the enactment of the Code in 1848 (§ 132), and pendency of action is now constructive notice only from the time of filing a notice of the pendency of the action as required by the Code. (Code of Civil Procedure, §§ 1670, 1671.) The rule as to third persons who acquire interests in real estate after the commence- ment of the action is therefore quite definitely fixed. See Hai- ley V. Ano, 136 IST. Y. 569. With regard to the priorities which different creditors may acquire in the real estate of their debtor which has been fraudulently conveyed there is not the same de- gree of certainty. Where judgments are docketed against a debtor who has made a fraudulent conveyance of his real estate, and actions are subsequently brought by junior judgment-cred- itors who succeed in setting aside the fraudulent conveyance, the question has arisen whether by their diligence they are entitled to satisfaction of their judgments in priority to senior judgments which have been docketed. Judgments are by statutes made liens upon real estate "in the order in which they g,re docketed. (Code Civil Procedure, § 1251.) And it has been held that the priority obtained by the docketing of a judgment applies to real estate which has been pre- viously conveyed by the debtor where such conveyance is subse- 342 GENERAL ASSIGNMENTS. [CH. XT. quently declared fraudulent. Such was the ruling in the case of White's Banh v. Farthing, 101 N". T. 344. This rule may, to some extent, be effected bj the form of remedy whicii the creditor pursues. In the Chautauqua County JBanh v. Risley, 19 N. Y. 369, it was held that where a receiver appointed in such creditor's action mates a sale of the property, he cannot • give a title good as against valid liens existing prior to the filing of the complaint. But when the holder of the lien or claimant of prior interest in the premises is made a party to the suit, and the validity of his claim or lien is an issue and is adversely disposed of by the judgment, a sale or conveyance by the receiver will vest in his grantee a superior title. Shand v. Hanley, 71 N. Y. 819. In Eriekson v. Quinn, 15 Abb. Pr. N. S. 166, reported less fully 47 N. Y. 410, Allen, J., states the remedies of creditors against real estate as follows : " The plaintiffs, judgment-cred- itors of O'Maley, in pursuing their remedy against the lands alleged to have been fraudulently conveyed to the defendant, had the choice of three several proceedings. They might have sold the premises by execution on the judgment, and left the purchaser, after his title should have become perfect by a deed from the sheriff, to contest the validity of the defendant's title, in an action of ejectment ; or, secondly, they might have issued their execution and brought their action to remove the fraudulent obstruction, and awaited the result of the action before selling the property ; or, thirdly, they had the right, upon the return of an execution unsatisfied, to bring an action in the nature of a creditor's bill, to have the conveyance to the defendant adjudged fraudulent as against their judgment, and the lands sold by a re- ceiver or other officer of the court, and the proceeds applied to the satisfaction of the judgment, as equitable interests and things in action of a judgment-debtor are reached and applied to the satisfaction of judgments against them." The learned judge pro- ceeds in his opinion to remark that under the cases of Chautau- qua Go. Bank V. White, 6?N. Y. 236, and Chautauqua Go. Bank V. Risley, 19 N. Y. 369, a creditor pursuing the last remedy is liable to lose the priority of his lien by judgment. Such does not seem to be tlie construction put upon those cases in Shand v. Hanky, 71 N. Y. 319, and Royer Wheel Go. v. Fielding, 101 § 273.J PRIORITY OP CREDITORS— REAL ESTATE. 343 N. T. 504 ; Wilkinson v. Paddock, 64 Supm. Ct. (57 Hun), 191 ; affi'd, 125 N. Y. 748. la the case of the New York Life Ins. Cmnpa/my v. Mayer., 19 Abb. N. C. 92 ; affi'd, 12 State E. 119 ; affi'd, 108 N. Y. 655, it was held that the lien acquired by the docketing of a judgment upon lands covered by the fraudulent assignment is not waived by the commencement of a suit by the judg- ment-creditor to set aside the assignment, seeking to have a receiver appointed and lands sold, if the plaintiff does not finally take the relief so demanded, but takes a decree declaring the as- signment void and his judgment a lien upon the lands as if the assignment had not been made. It was held also in that case, that the lien acquired upon individual property of a partner by the docketing of adjudgment by a firm creditor is superior to the equitable right of the individual creditors. It was also held that these rules applied to surplus moneys arising from the sale of real estate under a foreclosure of mortgage, the legal and equi- table liens being transferred to the fund as they existed against the real estate. Wilkimson v. Paddock, supra. The case of Warden v. Browning, 19 Supm. Ct. (12 Hun), 497, appears to be in conflict with the later decisions, though upon its special facts perhaps distinguishable. In Seouton v. Sender, 3 How. Pr. 185, where creditors' bills were filed in several actions against a jadgment-debtor, to set aside as fraudulent an assignment made by the debtor of all his real and personal estate, and to compel the satisfaction of the judgments out of the equitable interests and other property of the judgment-debtor, and the assignment w,as declared fraudu- lent and void as to creditors, and was decreed to be set aside, with directions to the receiver to convert the real and personal estate assigned to him into money for the purpose of satisfying the complainants, held, on a motion that the court prescribe a rule for a distribution of the funds received as proceeds of the personal and real estate in the hands of the receiver, there being insufficient to satisfy the whole, that the creditors wvre entitled to satisfaction of thei/r judgments' respectively out of the funds derived from the real estate in the order of priority of their judgments, and out of the personal fwnds in the order in which the hills were filed a/n,d the equitable liens created. 344 GENERAL ASSIGNMENTS. [CH. XV. In the same case it was also held that a judgment-creditor, who had a prior outstanding judgment against the judgment- debtor, and who was not made a party to any of the creditors' bills filed, and was not a party to the motion for distribution, could not be paid out of the fund in court, but that the sale of the real estate under the decree of the court did not subvert the lien of his judgment. In Wilkinson v. Paddock, 64 Snpm. Ct. (57 Hun), 191, a proceeding for distinction of surplus moneys arising out of a sale under foreclosure of certain lands alleged to have been fraudu- lently transferred, it was held that the judgments of the respec- tive judgment-creditors were entitled to prior payment in the order in which they were docketed and were not affected by the order in which suits to set aside the fraudulent transfer were in- stituted. The judgment-creditors who were adjudged entitled to priority in this proceeding had not in some instance taken any proceeding in avoidance of the fraudulent transfer. Brooks v. Wilson, 60 Supm. Ct. (53 Hun), 173, in which a conflicting doc- trine was declared, has been reversed. (See 125 N. Y. 256.) § 274. Creditors' suit— Priority of creditors— Personal property. — It is asserted by Commissioner Dwight in HoTbrodk v. New Jersey Zinc Co., 57 N. Y. 616, 629, where an exhaustive review of the cases will be found, that " an examination of the English reports will show that the law of lis pendens has only been used in England in cases involving the title to real estate or interests therein." He was referring, however, to the doc- trine as applied to the case of an innocent purchaser pending litigation. In this country, before the introduction of the Code practice and even since, the doctrine has been held applicable to transfers of personal property to innocent purchasers. The ap- plication of the general doctrine of lAs pendens to transfers of personal property pending the action was first discussed in this State in Murray v. Lylhum, 2 Johns. Ch. 441, by Chancellor Kent. In that case he applied it to certain moitgage securities, and there are reported cases in this State which would seem to extend the rule to personal property generally. Scudder v. Yan Amburgh, 4 Edw. Ch. 29 ; Edmeston v. Lyde, 1 Paige, 637, 640 ; see Corning v. White, 2 Paige, 567 ; Brinkerhoff v. § 274.J CKEDITORS' STJIT— PBIOEITY OF CEEDITOES. 345 Brown, 4 Johns. Ch. 671 (see opinion of D wight, C, MoThrook V. N. J. Zinc Co., supra). It seems to be conclusively settled, however, that the rule does not apply to transfers, pending liti- gation, of stocks, bonds or negotiable securities. Leitoh v. Wells, 48 N. Y. 586 ; Ooimty of Wa/rren v. Marcy, 97 U. S. 96 ; Dovey''s Appeal, 97 Penn. St. 153 ; Holhrooh v. Wew Jersey Zinc Co., 57 N. Y. 616 ; Lvndsley v. Diefendorf, 43 How. Pr. 357. The common law doctrine of lis pendens, as it relates to innocent purchasers, is a harsh one, and the party seeking to apply it must bring himself precisely within the rule. ITot only must the bill have been filed, but it must contain so definite a description of the property as to be notice to the purchaser, if he examine the bill. Under the Code Practice which does not require the filing of pleadings until final judgment, it may well be doubted whether the common law doctrine of lis pendens in its technical applica- tion to innocen-t purchasers of personal property any longer exists. See Holhrooh v. N. J. Zinc Co., 57 N. Y. 616 ; Leitch V. Wells, 48 ]Sr. Y. 585, 609 ; Miller v. Sherry, 2 Wall. 237. But as between the parties to the suit and persons having actual notice of the pendency of the litigation, and as determin- ing the priorities between various judgment-creditors seeking to reach the property of their debtor, the doctrine of lis pendens has undoubtedly a well-established and important position. In Claflin V. Gordon, 46 Supm. Ct. (39 Hun), 54, 59, Mr. Justice Bradley speaks upon this subject as follows : " "When there is no interruption by any effectual intervening rights of others, the successful result of an action brought to reach property, has rela- tion to the time of its commencement, and the judgment perfects the relief sought as of such time, so that the defendants, in the meantime, cannot legally do anything with the subject of the action to impair the beneficial effect of the judgment, nor can a third person affected by notice of the action and its purpose, be permitted (except by proceeding in inmtum by legal process) to acquire any rights to the prejudice of the relief which the judg- ment purports to give to the plaintiffs." This rule is qualified, as to persona] property capable of levy and sale under execution. A creditor who seizes such property, even after the commence- ment of legal proceedings effecting it, is not prejudiced by the 346 GENERAL ASSIGNMENTS. [CH. XV. pendency of such proceedings, but may proceed to a sale, and the satisfaction of his debt out of such property, and his right in that regard will not be limited until an order is made ap- pointing a receiver. Storm v. Waddell, 2 Sandf. Ch. 491, 516 ; Davenport v. Kelly, 42 N. Y. 193 ; Albany City Bank v. Scher- mevkorn, Clarke Ch. , 297 ; Storm v. Badger, 8 Paige, 130 ; Claflin V. Gordon, supra ^ Knower v. Cent. Nat. Bank, 124 N. Y. 552, 559 ; Kitchen v. Lowery, 127 JSf. Y. 53. As to the equitable assets of the judgment-debtor the lien created by the filing the bill has been frequently recognized and applied. Alba/iiy City Bank v. Schermerhotn, Clarke Ch. , 297 ; Utica Ins. Co. v. Power, 3 Paige, 365 ; Mayden v. Bucklin, 9 Paige, 512 ; Roherts v. Albany cfc W. S. R. E. Co., 25 Barb. 662 ; Jeffres v. Cochrane, 47 Barb. 557 ; affi'd, 48 N. Y. 671 ; Beck V. Burdett, 1 Paige, 305 ; Talcott v. Thomas, 50 State R. 621 ; Metcalf v. Del Valle, 71 Supm. Ct. (64 Hun), 245. The commencement of an action by a creditor to reach the choses in action and equitable interests of the debtor, which can- not be reached by execution at law, creates a lien in favor of the plaintiff, good against all persons who have knowledge or are chargeable with knowledge of such lien. Jeffres v. Cochrane, 47 Barb. 557 ; affi'd, 48 N. Y. 671. § 275. Creditors' suit — Time at which the plaintiff's right attaches. — The priorities of creditors in the debtor's real estate and the method in which they may be secured have been consid- ered {ante, § 273). As to the debtor's personal property a dis- tinction is to be observed between rights acquired as against innocent purchasers and rights acquired as against purchasers with notice. As to the former at common law, the rule was well established that the lis pendens began from the service of the subpoena after the bill was filed. "This," says Bennett in his work on lis pendens (section 28), " has been the rule for over three hundred years, established by a long series of well- considered cases, and while, as a new question, very strong rea- sons may be assigned for a different rule, it is too well established to be now shaken." He cites the following New York cases : Murray v. Ballou, 1 Johns. Ch. 566 ; Murray v. I/ylburn, 2 Id. 441 ; Green v. Slayter, 4 Id. 38 ; Hopkins v. McLaren, 4 Cow. § 275.] creditors' suit — priority of creditors. 347 667 ; Murray v. Blatchford, 1 Wend. 583 ; Jackson v. An- drews, 7 Id. 152 ; Pa/r'hs v. JaoJcson, 11 Wend. 442 ; Griffith v. Griffith, 1 Hoffm. Ch. 153 ; White v. Carpenter, 2 Paige, 217, 252 ; Hayden v. BucMvn, 9 Id. 512 ; Jackson v. Losee, 4 Sandf. Ch. 381. As to third parties a lis pendens is not created under the pres- ent system until the summons has been served and a complaint filed, in which the claim of the plaintiff upon the specific prop- erty is set forth. Courts will not indulge in any presumption that the complaint was filed for the purpose of effecting an inno- cent purchaser with notice of pendency. Leitch v. Wells, 48 N. Y. 585. Indeed, it may well be doubted whether the Code Practice, with its provisional remedies, contemplates the con- tinued existence of the chancery doctrine of lis pendens as to innocent purchasers, except in the manner provided as to real estate. As to purchasers with notice, and as determining the priorities between creditors, the priority is obtained at the time when the court first acquires jurisdiction at the suit of the creditor. Under the old chancery practice the creditor who, after first filing his bill, obtained the first service of the subpoena, or made a honafide attempt to serve the same, had his suit first commenced and was entitled to a priority in payment out of the property of the judg- ment-debtor. Boynton v. B,a/wson, 1 Clarke Ch., 584 ; Corning V. White, 3 Paige, 567 ; Fitch v. Smith, 10 Paige, 9 ; Burrell V. Leslie, 6 Paige, 445. In Allert v. Bach, 52 Super. Ct. (20 J. & S.) 550 ; affi'd, 101 N. T. 656, it appeared that after a summons had been served on the assignee in an action to set aside an assignment, which was not accompanied with a complaint, nor did it designate the pur- pose of the action, the assignee paid a sum of money to a pre- ferred creditor ; in proceedings for an accounting on a judgment in the action setting aside the assignment, it was held that in- asmuch as the assignee had actual notice of the object of the action before making the payment, he could not be allowed the sum so paid. Whether the title of a receiver appointed on the final decree, to tangible personal property, dates back to the beginning of the action or only to the date of the order of appointment, depends 348 GENEEAL ASSIGNMENTS. [CH. XT. upon whether legal rights have intervened. In Clark v. Brock- way, 1 Abb. Dec. 351, it seems to be assumed that as to some classes of property the receiver's title commences from the filing of the order directing the appointment of the receiver, and that it relates back to the date of that order only. Becker v. Torrance, 31 N. Y". 631 ; Van Alstyne v. Cook, 25 Id. 489, and Damenport v. Kelly, 42 IST. Y. 193, hold that the lien, if any, created by the filing of a creditor's bill in favor of the plaintifE upon leviable personal property, is subject to priori- ties to be obtained by other creditors, by judgment or attach- ment, at any time prior to the appointment of a receiver. Whether the junior of tvro creditors who has commenced actions could obtain a priority as to personal property over the senior, by procuring the appointment of a temporary receiver, has not been determined, but it seems that he could under the decisions cited. In Glafiin v. Gordon, 46 Supm. Ct. (39 Hun), 54, 57, J. Brad- ley stated the rule as follows : " By the commencement of an action in equity, by a judgment-creditor as such, he obtains a lien upon the things in action and equitable interests of the debtor, which is defeasible until, and becomes effectual upon, his recov- ery of judgment (citing cases). But the rule is otherwise in re- spect to property which is the subject of levy by execution, in so far that the action is no interruption to such legal remedy. And no lion is acquired in or by the action to defeat the right to make such levy until a receiver is appointed." A creditor by the commencement of a judgment-creditor's suit in equity obtains at once a lien on all choses in action and per- sonal property not subject to levy, and upon all equitable inter- ests in real estate, which the judgment-debtor may have. The phrase " commencement of a judgment-creditor's suit" is here used technically, and includes all steps necessary to create a lis pendens — a pending suit in equity. Thus, under the old chan- cery practice it included, first, filing of the bill ; second, issuing of subpoena, and, third, service of the subpoena, or a bona fide attempt to serve the same. Boynton v. Rawson, 1 Clarke Ch., 584 ; Corning v. White, 2 Paige, 567 ; Fitch v. Smith, 10 Paige, 9. § 276. Protection of assignee— Takes subject to liens § 277.] PROTECTION OF ASSIGNEE. 349 allowed for— Liens paid. — The assignee takes the assigned property subject to all liens and equities (Chap. XS.). The set- ting aside of the assignment does not disturb the validity of such liens, although it does in one instance restore a right which would otherwise have passed to creditors. When the wife of the assignor has joined in the conveyance if it is set aside as fraudulent, her dower is restored. Wilkinson v. Paddock, 64 Supm. Ct. (57 Run), 191, 196 ; RvthoUiffe v. Shea, 103 N. T. 153. If the assignee has paid off valid liens and encumbrances upon the assigned property, and the assignment is afterward set aside, he will be allowed the amount so advanced. He must account for the value of the property he has received under the assign- ment, but subject to valid liens. HaTniUon Wat. Bank v. Hoi- sted, 134 N. Y. 520. The principle upon which the assignee is allowed such ad- vances is distinguishable from that which denies to a fraudulent grantee, upon an accounting with creditors who have set aside the assignment, the consideration paid by him upon the convey- ance. Boyd V. Dunla^, 1 Johns. Ch. 478 ; Union Nat. BamJc V. War)ier, 19 Supm. Ct. (12 Hun), 306 ; Shand v. Homley, 71 N. Y. 319 ; Davis v. Leopold, 87 N. Y. 620. The consid- eration paid by the fraudulent grantee is not a charge upon the property. K the property is unencumbered he tal^es the whole and must account for the whole, but if the property is encum- bered, he takes only the equity of redemption and must account only for that. If he pay off the encumbrance, creditors are still only entitled to the equity, and to give them the property free from the lien would be a sequestration of the property of the as- signee to which creditors have neither legal nor equitable right. See opinion Parker, J., Hamilton Nat. Bank v. Hoisted, 134 K Y. 520, 523. § 277. Protection of assignee — Payments to creditors, — When a general assignment is set aside as fraudulent against creditors, the assignee will be allowed for moneys paid by him to creditors before the commencement of the action. Wake- man v. Orover, 4 Paige, 23 ; Ames v. Blunt, 5 Paige, 13 ; Collumb ^. Read, 24 N. Y. 505 ; Averill v. Louchs, 6 Barb. 350 GENERAL ASSIGNMENTS. [CH. XV. 470, 477 ; Iddings v. Bruen, 4 Sandf. Ch. 417 ; Pond v. Corn- stock, 27 Supm. Ct. (20 Hun), 492 ; affi'd, 87 N". Y. 627. " This is because the assignment, as between the parties to it, is valid, and the assignee in making such payments is doing no more than the assignor might at that time lawfully have done if no assignment had been made. In such case all that can be said is, if the assignment be declared void, that the assignor paid cer- tain of his creditors indirectly and through the agency of the as- signee at a time when he had the right to do it directly but for the assignment." Peekbam, J., If at. B. dt D. Bank v. Hvh- hell, 117 N. Y. 384, 397. The assignee will be protected in payments made to hona fide creditors even though he be chargeable with participation in the fraud rendering the assignment invalid. Smith v. Wise, 132 N. Y. 172 ; rev'g s. c. sub. nom. Smith v. White, 27 State R. 227 ; Enower v. Cent. Nat. Bank, 124 E. Y. 552, 563 ; affi'g s. c. snb. nom. First Nat. Bank v. Central Nat. Bank, 60 Supm. Ct. (53 Hun), 575, and even though a firm of which he is a member is endorser upon the preferred notes which are paid. But there are cases that hold that he will not be allowed pay- ments made to himself. Bostwick v. Beiser, 10 Abb. Pr. 197 ; Coope V. Bowles, 42 Barb. 87 ; Swift v. Hart, 42 Supm. Ct. (35 Hun), 128. See Hone v. Henriquez, 13 Wend. 240. It is on the principle of the above cases that courts have declined to compel preferred creditors who have received payment of their debts from the assignee to account for the moneys so received to a creditor who subsequently brings an action in which the assign- ment is set aside. Knower v. Cent. Nat. Bank, 124 N. Y. 652 ; Peyser v. Myers, 135 N. Y. 599. If the payment is made by the assignee after the creditor's suit is commenced a different rule prevails under the principles of Us pendens here- tofore considered. But the bringing of an action by one cred- itor before the payment will not avail another creditor whose action was not brought until after the payment. Knower v. Cent. Nat. Bank, supra. "When the preferred debt paid by the assignee was in excess of the amount actually due by reason of an erroneous calculation of interest, the excess having been refunded, it was held that the actual debt could not be recovered by a judgment-creditor upon §§ 278, 279.] PEOTECTION OF ASSIGNEE. 351 whose judgment the assignment had been declared invalid. Peyser v. Myers, 135 N. Y. 599. § 278. Protection of assignee— Payments made in defend- ing the trust and in preservation of estate.— It has been seriously questioned whether, when the assignment is set aside by judgment-creditors, the assignee should, upon accounting, be allowed for his expenses in defending suits, and also whether he should be allowed expenditures made in the preservation or betterment of the estate. In Dorney v. Thacher, 83 Supm. Ct. (76 Hun), 361, it was held that the assignee, although not guilty of participation in the fraud, will be allowed counsel fees expended in defending the assignment. This case overrules Myer v. Hazard, 56 Supm. Ct. (49 Hun), 222, and Dexter v. Adler, 1 N. Y. Supp. 684. But where the assignee himself is a party to the fraud he will not be allowed for such expenditures. Smith V. Wise, 132 N. Y. 172 ; Sands v. Codwise, 4 Johns. 536 ; Davis v. Leopold, 87 N. Y. 620 ; Swift v. Hart, 42 Supm. Ct. (35 Hun), 128. As to expenditures made by the assignee in keeping up the estate and in its management the assignee will be allowed such disbursements as were made in good faith and are beneficial to creditors. Loos v. Wilkinson, 113 N. Y. 485 ; rev'g 58 Supm. Ct. (51 Hun), 74 ; Smith v. Wise, 132 F. Y. 172 ; Colburn v. Morton, 1 Abb. Dec. 378 ; Scouton v. Bender, 3 How. Pr. 185. In Loos V. Wilki/nson, supra, the assignee was allowed pay- ment made for taxes and assessments for interest on mortgages and for necessary repairs to real estate by a divided court for commissions paid an agent in collecting rents. He was disal- lowed payments for premiums of insurance on the ground that the latter in no way benefited the creditors, the policies being payable to the assignee, la Smith v. Wise, supra, where the assignee was implicated in the fraud, he was allowed the amount paid workmen in the factory for services" performed prior to the assignment and the additional value given to the stock by work- ing it after the assignment, so as to give the creditors the value only of the property as of the date of the assignment. He was disallowed all other disbursements. § 279. Protection of assignee— Commissions.— It seems to 352 GENERAL ASSIGNMENTS. [cH. XV. be determined by the weight of authority in the lower courts that where an assignment has been set aside for fraud the assignee can recover no commissions and no compensation for his services, although he be altogether innocent of any knowledge of or par- ticipation in the assignor's fraud. Dorney v. Thacher, 83 Supm. Ct. (76 Hun), 361 ; Mayer v. Hazard, 56 Supm. Ct. (49 Hun), 222 ; Dexter v. Adler, 1 IST. Y. Supp. 684. In Leaviit v. Yates^ 4 Edw. Ch. 134, and Cooj)e v. Bowles, 42 Barb. 87, it was held that the assignee was not entitled to com- pensation where a general assignment was set aside, but in each of those cases the assignment was void, not voidable. (See 4 Ed. Ch. 205.) In Boatwiak v. Beizer, 10 Abb. Pr. 197, the assignee was allowed all payments made to others than himself. In MacDonald v. Moore, 1 Abb. N. C. 53 ; Havemeyer v. Loel, 5 Abb. N. C. 338 ; Piatt v. Archer, 13 Blatchf. 351, where assignments were set aside in the United States courts in bank- ruptcy, the State assignees were allowed their commissions. In re Stuhhs, 4 K B. E. 37ti ; Clark v. Marx, 6 Ben. 275 ; Burkholder v. Stump, 4 N. B. R. 597, a contrary rule was ap- plied. In Hunker v. Bliuj, 9 Fed. E. 277, where the assignment was declared void, the assignee, although not allowed commissions as such, was allowed an aggregate sum as compensation for services which he had rendered and which were regarded as beneficial to the estate. If the question can now be considered as open, the rule most consistent with what appears to be just and riglii is that the as- signee should be paid for his services upon a quantum meruit, so far as they have been beneficial to the judgment-creditor. In preserving the assigned estate and converting it into money, if the services have been faithfully rendered the assignee has done that which would necessarily be done by a receiver at the ex- pense of the estate. The receiver appointed by the decree in the creditor's suit should not be paid for services he has not ren- dered, and the judgment-creditor ought not to profit by such services at the expense of an innocent assignee. Moreover, the assignee's right to compensation grows out of the direction of the assignor to him to do that which without the assignment he § 279.] PROTECTION OF ASSIGNEE— COMPENSATIOlf. 353 might lawfully do, and so far as he has in good faith performed such lawful directions, the funds in his hands are chargeable with the payment _pro iMnto of his services under the doctrine of Nat. B. cSs D. Bank v. Hullell, 117 N. Y. 384, 397 ; Knower v. Cent. Nat. BamJe, 124 N. Y. 552, 561, and iimith v. Wise, 132 N. Y. 172, 179.' ' The general rule applicable to the allowance of expenses incurred by trustees has been frequently stated. It is expressed by Judge Duer, in Noyes v. Blakeman, 3 Sandf. 531, 643, in this language : " The law is most clearly settled, and it would be a reproach to its principles or its administration were it otherwise, that all the necessary expenses of a trustee, tliat is, all expenses of every kind, which are reasonably and in good faith incurred by Mm, for the defence, protection, or reparation of the estate, are to be treated in equity as a charge, in all cases," either on the income or principal of the trust estate. The principle^ upon which this doc- trine rests, as applied to counsel fees, is thus stated by Finch, J., in Matter of Attorney- General v. North American Life Insurance Co., 91 N. Y. 57, 61 : " The principle upon which counsel fees are granted in such instances is that of a necessary disbursement, and it stands upon the same ground as any other necessary expense of the preservation of the fund. Often and usually the trustee has no interest, outside of the performance of duty. What he does is for the benefit of others whose interests are for the time being in his keeping . He owes them no duty to expend his own money for their benefit, and what- ever he does so expend in the reasonable and prudent care of the trust fund is properly allowed to him as an expense. Counsel fees thus incurred to an extent approved by the court may, therefore, be allowed him, and if fixed in advance of his actual payment, they are none the less the necessary ex- penses of his trust." So in Downing v. Marshall, 37 N. Y. 380, 389, it is said, as the rule at com- mon law : " In short, the trustee, though allowed nothing for his trouble, is allowed everything for necessary expenses in executing the trust. His duties relate to the property and interests of others, and he is to be indemnified for necessary expenses in protecting such trust property, and has an equitable lien upon it for such expenses." The opinions thus expressed are in harmony with all the adj udged cases and with the conclusions of text writers. Sullivan v. Miller, 106 N. Y. 635, 643 ; see Lewin on Trusts, Ch. XXIV., § 3 (9th ed., p. 714; ; Pomeroy's Equity, 2d ed., § 1085 ; Perry on Trusts, 4th ed., § 910. The general rule being thus unquestioned, the inquiry is whether it in- cludes expenses of litigations unsuccessfully undertaken or defended by the assignee without practical benefit to the estate, assuming them to have been incurred in good faith and with the prudence which an intelligent and careful man would show in his own affairs. A rule which would preclude a trustee from such allowances would certainly be a severe one. It would require of him an infallibility of judgment which we do not expect in the highest judi- cial tribunals where opinions are sometimes conflicting. It is suggested in 23 354 GENERAL ASSIGNMENTS. , [CH. XV. § 280. Title of purchaser from assignee. — Though a general assignment be fraudulent as against creditors, this does not afEeet the title of a purchaser from the assignees, if he be not connect- Mayer v. Hazard, supra, that an assignee may protect himself against loss by calling upon the creditors to indemnify him before he proceeds with litigation. It is doubtful whether that is a practical protection to the assignee. Un- doubtedly, after the expenditures have been incurred he would have a remedy over against the cestui que trust (Code, § 1916), but whether he could compel the cestui que trust in advance to indemnify him is not clear. Lewin on Trusts, Ch. XXIV., § 2 (9th ed., p. 733) ; Praser v. Murdoch, L. R. 6 Appeal Cases, 855, 873. It would seem that if minors or other persons under disability were among the cestui que trust, the trustee could not escape liability for abandoning his trust by calling upon them for indemnity. And there are cases where the assignee has been held personally responsible to creditors for not bringing actions the result of which we could not with certainty foresee. (See post, Chap. XXIV.) Indeed^it is the positive duty of a trustee to defend the life of the trust whenever it is assailed, if the means of defense are known to him or can with diligence be discovered. Cuthbert v. Ohauvet, 136 N. Y. 326, 332. As between the cestui que trust and the trustee, there seems to be no re- ported case where the trustee has been held personally liable for expenses in- curred in defending or prosecuting actions on behalf of the trust, because he was unsuccessful, if he was guilty of no negligence or wrong. The contrary was held in Courtney v. Rumley, 6 Irish Reports, Equity, 99 ; Holford v. Phipps, 4 Beav. 475 ; Poole v. Pass, 1 Beav. 600. With regard to cases where the trust is set aside ))y creditors, the decisions are conflicting as to whether the trustee should be allowed for his expenses of defending against their attack. Wakeman v. Orover, 4 Paige, 23, cited in Mayer v. Hazard, was taken to the Court of Errors, and the opinions in that court are reported in 11 Wend. 187. On the question of allowances, a divided court held that the trustee and all the parties to the suit were entitled to their costs to be paid out of the fund. In Ooldsmith v. Russell, 5 DeG. M. & G. 547, 556, upon a decree setting aside a trust at the suit of a creditor, the trustee was allowed all his costs and expenses. And in Travis v. lllingioorth. Weekly Kotes, 1868, p. 206, which is an ex- treme case, the court held that where trustees had been invalidly appointed, but had acted bona fide in the trust, believing themselves to be duly appoint- ed, they were entitled to their cost, charges and expenses as if their appoint- ment had been valid. In Woods V. Axton, Weekly Notes, 1866, p. 207, where an assignment for creditors was set aside at the suit of an assignee in bankruptcy, it was held that the voluntary assignee should be allowed his expenses. But in Piatt v. Archer, 13 Blatchf. 851 ; Smith y. Dresser, L. R. 1 Eq. 651, and JElsey v. Cox, 26 Beav. 95, which were all cases in bankruptcy, the courts refused to allow the trustee his expenses of defending the suit in which the assignment was set aside. In neither Ames v. Blunt, 5 Paige, 13, nor Colburn y. Morton, 1 Abb. Dec. § 280.] PROTECTIOlSr OP ASSIGNEE — COMPENSATION. 355 ed with the fraud, and, in fact, bo a purchaser in good faith and for a valuable consideration, and without notice of the fraud. Sheldon v. StryJcer, 42 Barb. 284 ; s. c. 27 How. Pr. 387 ; Stearns v. Oage, 79 IST. T. 102 ; s. c. 1 Am. Insol. R. 333. 378, was the precise point we are now considering discussed or passed upon. In Meyers v. Beeher, 36 Supm. Court (39 Hun), 567 ; affl'd, 95 N. T. 486, such expenses were allowed without dispute, and see Bostwick v. Beizer, 10 Abb. Pr. 197 ; MacDonald v. Moore, 1 Abb. N. 0. 53 ; Havemeyer v. Loeb, 5 Id. 338. In 0' Conner v. CHfford, 117 N. Y. 375, the cases are received that was a case where an executor sought protection for the payment of moneys for masses under a trust which was declared invalid. The question of the allowance of expenses in attempting to support where the trustee is not chargeable with knowledge of facts which render it illegal was not before the court. This being the state of authorities, it is permissible to examine the question upon principle. The distinction between a trust which is absolutely void and one which is voidable merely must be borne in mind. In the latter case the conveyance is good as against the grantor until it is judicially declared in- valid. In the case now under discussion, the person seeking to set aside the trust is not one having the legal or the equitable title to the property con- veyed, but is simply a creditor seeking to collect his debt, A creditor's right in any specific property of his debtor arises at law only by levy of process ; in equity by the operation of equitable remedies. In neither tribunal can the creditor take more than the debtor has at the moment of seizure, except so far as a Court of Equity makes its decree retroactive under the doctrine of Us pendens. If, therefore, the assignee can be charged with moneys which he has paid out before the appointment of a receiver, it must be because the judgment-creditor has acquired a lien upon such money by the commence- ment of his suit. But the assignee acquires by virtue of his appointment as against the as- signor an equitable charge upon the property in his hands for the repayment of all his expenses. In making disbursements to sustain the trust imposed upon him, he is at once a trustee for creditors and he is the agent of the as- signor. The judgment-creditor succeeds only to the rights of the assignor as they are at the moment his attack becomes operative. He can get no more than the assignor himself is entitled to at that moment. Nat. B. & D. Bank v. Hublell, 117 N. Y. 384, 397 ; Knower v. Cent. Nat. Bank, 134 N. Y. 553. The whole inquiry therefore resolves itself down to the question whether the cred- itor's lien created by the commencement of his action is superior to that of the assignee who has disposed of the property under the direction of the trust before the appointment of a receiver. This, at most, is not a question of legal right, but of the enforcement of equitable charges. Creditors do not stand as the legal owners of the fund in the hands of the assignee. The lien created by the commencement of a creditor's action is an equitable lien, and should be so enforced as not to work an injustice. An assignee who has ac- cepted an apparently valid trust authorized by law, and who is ignorant of 356 GENERAL ASSIGNMENTS. [CH. XV. It was decided in the early case of Anderson v. Hoberts, 18 Johns. 515 ; rev'g Roberts v. Anderson, 3 Johns. Ch. 371, that the provision in the statute of fraudulent conveyances (2 fl. S. 137, § 5 ; 2 Birdseye, 1237, § 23) which protects purchasers for a valuable consideration without notice applies equally to pur- chaser from a fraudulent grantor or from a fraudulent grantee. Such a transfer is valid and effectual under the authority of the original proprietor, who has still the right to sell the prop- erty. Pine V. Eikert, 21 Barb. 469. But if the assigned property were such that it might be seized and sold on an execution, it seems it might still be levied on in the hands of a purchaser from the assignees, provided he had either actual or constructive notice of the fraud at the time of the assignment. Ames v. Blunt, 5 Paige, 13. § 281. Costs. — Where an assignment is of such a suspicious character as would naturally induce a creditor to call for explana- tion, and an action is brought to set aside the assignment, the plaintiff will not be subjected to costs, if the relief asked for be not granted. Cunningham v. Freeborn, 11 Wend. 240. The assignee will not be charged with costs where he is not implicated in the assignor's fraud and where he is not personally acquainted with the facts constituting the fraud. Durant v. any fraud in its creation, and who assumes towai-d innocent third parties the obligation to maintain the trust, has a manifest right to appeal to a court of justice for protection against loss in the performance of his duty, up to the point at least where it can be shown that he knew or had reason to know that the trust was invalid. It does not seem to be a harsh rule to reqmre that the creditor who has possession of evidence unknown to the assignee, upon which he expects to be able to set aside the assignment, should at least proceed to the appointment of a receiver on such evidence before it should be adjudged that the assignee should be held personally responsible for the protection of the trust which he has innocently assumed. It is to be observed, however, that the only cases in which the assignee has not been allowed such expenses are those in which the attack was made by an assignee in bankruptcy. The title of an assignee in bankruptcy to prop- erty fraudulently disposed of by the bankrupt, is in some respects different from the right of a judgment-creditor toward such property. An adjudica- tion in bankruptcy clothes the assignee at once with the title to all the bank- rupt's property, and when he removes a fraudulent incumbrance he simply frees the estate which is already his from such incumbrance. Such, however, as we have seen, is not the precise position of a judgment-creditor. § 282.] THE KELIEF GRANTED. 357 Pierson, 33 State R. 207 ; Faxon v. Mason, 83 Snpm. Ct. (76 Hun), 408 ; WM v. Daggett, 2 Barb. 9. See Matter of Felt v. Bell, 59 Supm. Ct. (52 Hun), 60. The court may order the costs of all parties to be paid out of the funds in the hands of the assignees. Orover v. WaTceman, 11 Wend. 187, 226. It is not usual to charge the assignee with costs, even when the assignment is fraudulent on its face, except in cases of gross abuse of his trust. Wdib v. Daggett, 2 Barb. 9. Where the assignee, in a conveyance which is impeached on the ground of fraud, instead of disclaiming, puts in an answer which requires the complainant to reply and go into proofs, and it turns out that the conveyance is fraudulent, and such assignee had direct or constructive notice of the fraud, he will be sub- jected to the costs of the suit. Mead v. Phillips, 1 Sandf. Ch. 83 ; see Zeavitt v. Tates, i Edw. Ch. 134. * § 282. The relief granted. — The Code of Civil Procedure provides for the judgment which is to be entered in cases in judgment-creditors' actions brought under the Code procedure, § 1873. Assignments, fraudulent as to creditors under the stat- ute, are not void ai initio, but voidable only at the instance of creditors who file bills to impeach and set them aside, and when an assignment is found to be thus fraudulent, the decree gener- ally goes no further than to adjudge it fraudulent as to the cred- itor who has filed the bill, and to set it aside so far as to give an opportunity of obtaining his debt and costs out of the property which was covered by it. Davis v. Perrine, 4 Edw. Ch. 62, 66 ; Henriguez v. Hone, 2 Id. 120 ; s. c, sub. nom. Hone v. Hen- riguez, 13 Wend. 240 ; Wakeman v. Orover, 4 Paige, 23, 42, 43 ; Hitchcock v. St. John, Hofifm. Ch. 511 ; Scouton v. Bender, 3 How. Pr. 185. So a receiver, appointed in supplemental proceedings, who brings any action to set aside a fraudulent conveyance made by the judgment-debtor, can obtain a decree setting aside the trans- fer only so far as is necessary to satisfy the judgment upon which he was appointed, with the costs. Bostwich v. MencTe, 40 N. Y. 383 ; see Verplanoh v. Van Bv/ren, 76 K. Y. 247. When the property has been converted into money, the decree 358 GENERAL ASSIGNMENTS. [CH. XV. may simply direct that the assignee pay the plaintiff's claim and costs out of the assigned property or its proceeds in his hands. Lester v. Pollock, 3 Kobt. 691, 693. But when it may be neces- sary to effectuate the purpose that the property be disposed of or otherwise made available for the satisfaction of the judgment, a receiver will be appointed by the court, and he may be directed to sell and apply the proceeds to the payment of the plaintiff's debt. Edmeston v. Lyde, 1 Paige, 637. So where an action is brought by a judgment-creditor on be- half of all other judgment-creditors as well as himself, to set aside fraudulent conveyances of the debtor's real estate, a judgment is not improper adjudging the appointment of a receiver to take a conveyance of and to sell the real estate. Shand v. Hanley, 71 N. Y. 319 ; OUft v. Moses, 82 Supm. Ct. (75 Hun), 517 ; s. o. 57 State R. 347. And the assignee will be directed to account for the assigned property before a referee. Produce Bank v. Morton, 67 N. Y. 199 ; Myers \. Becker, 95 N. Y. 486 ; affi'g 36 Supm. Ct. (29' Hun), 567. Where the action is framed for the purpose of setting aside the assignment, if the assignment is sustained, the assignee will not be compelled to account in that action. The creditor is not entitled to such a decree. Cunningham v. Freeborn, 11 Wend. 240 ; Nicholson v. Leavitt, 4 Sandf. 252, 311. When the case is tried before a referee the referee's report stands as the decision of the court, but the referee does not select the receiver, though he adjudges that one should be appointed. The practice seems to apply to the court at special term to name the receiver. Burant v. Pierson, 33 State R. 207. The judg- ment also appoints a referee before whom the proper parties de- fendant are required to account for the assigned property which has come into their hands. Produce Bank v. Morton, 67 N. Y. 199. The proceedings on the accounting are in general regu- lated by the Chancery rules and follow as far as consistent the proceedings for an accounting by the assignee under the assign- ment. § 283. Enforcement of judgment.— The practice when the plaintiff is successful in his attack upon the assignment provides § 283.] ENFORCEMENT OE JUDGMENT. 359 first for a preliminary or interlocutory judgment setting aside the assignment as to the plaintiff's judgment, and appointing a re- ceiver of the assigned property ahd directing the parties defend- ant to account for the assigned property before a referee. Upon the coming in of the referee's report final judgment may be en- tered directing the assignee, or in a proper case the assignor, or both, to pay over to the receiver the proceeds of the assigned property and so much thereof as remains in specie. A judgment directing the payment by the assignee to the receiver of a specific sum of money cannot be enforced by proceedings for contempt under § 2263 of the Code of Civil Procedure. Such a judg- ment is final and can be enforced by execution, and hence the remedy by contempt is not available (Code of Civ. Pro., § 1241). Myers v. Beoher, 95 N, Y. 486 ; affi'g 36 Supm. Ct. (29 Hun), 567 ; Matter of Hess, 55 Supm. Ct. (48 Hun), 586. But it seems that if the decree directs the delivery to the receiver of specific property, that portion of the decree may be enforced by proceedings for contempt. People ex rel. Borst v. Orant, 47 Supm. Ct. (41 Hun), 351. In this particular the enforcement of a judgment in action to set aside the assignment differs from a decree upon a final accounting under the assignment directing a distribution by the assignee. By recent statute (Laws of 1894, chap. 134) a decree upon a final accounting directing the pay- ment of money may be enforced by proceedings to punish the assignee for a contempt of court. See Moss v. Butler, 64 Supm. Ct. (57 Hun), 110. CHAPTER XVI. AMENDMENT, REFORMATION AND REVOCATION OP ASSIGNMENTS. § 284. Alteration by assignor. — The general principle in reference to all contracts is, that having been once made they are not subject to alteration or revocation, except by the consent of all parties or by a decree of a competent court of equity on the ground of mistake. This principle is applicable to general as- signments. After the execution and delivery of the instrument, the assignor has no power to alter, amend or vary its terms or provisions. Sheldon v. Smith, 28 Barb. 593 ; Porter v. Will- iams, 9 N. Y. 142 ; Metcalf v. Van Brunt, 37 Barb. 621 ; Messonnier v. Kauman, 3 Johns. Ch. 3 ; Bell v. Holford, 1 Duer, 58. The court has no power under the statute to amend the assign- ment, although the schedules may be amended. Matter of Wil- son, 1 Mon. L. B. 5. But this principle applies only to instruments which have be- come perfected and completed instruments, although voidable at the election of creditors, and not to such as are wholly void. Thus an assignment which has not been properly acknowledged is wholly invahd under the statute (see ante, § 149). A subse- quent acknowledgment, therefore, does not vary the instrument, bat simply gives it a legal inception. So where an assignment was held void because the inventory and schedules were not filed within the time limited in the statute (the rule is now otherwise), it was held, that inasmuch as the assignment was insufficient to convey any title to the assignee, a subsequent conveyance by the assignor was good. Juliand y.%Rathhone, 39 N. Y. 369. "Where the assignment is sufficient to convey a title to the as- signee, although voidable as to creditors, the rule is different. Thus, in the case of Sheldon v. Smith {supra), it was held that he effect of an assignment could not be varied by the execution § 284. J ALTEBATION BY ASSIGNOR. 361 of a note after the assignment, dating it back to a day prior to the assignment, for the purpose of having the note embraced in the schedule of debts preferred in the assignment. Nor can a defect in an assignment be cured, after creditors have acquired a lien by the subsequent execution of an instrument designed to remedy the evil. Thus, where an assignment was fraudulent and void because containing a direction to the assignee to sell on credit, and after the institution of supplemental proceedings by creditors, the assignor executed another instrument, reciting the previous assignment and directing the assignees to sell for cash only, it was held that the assignors had no power to revoke or alter the previous assignment, at all events not to the prejudice of a creditor whose lien on the property had attached by the in- stitution of supplementary proceedings. Porter v. Williams, 9 ISr. Y. 142. The doctrine of this case has been approved, although the point was said to be not necessarily involved in the case. See Gates v. Andrews, 37 N. Y. 657. In Whitoomb v. Fowle (7 Abb. N. C. 295), where, after exe- cuting an assignment which preferred a special partner, and after an action had been brought by a creditor to have the assignment declared void, the assignee re-assigned the property to the as- signors, who thereupon executed an assignment for the equal benefit of their creditors, it was held that such revocation in no way prejudiced or impaired the rights of the attacking creditors. In Hone v. Woolsey (2 Edw. Ch. 289), where the original as- signment was constructively fraudulent on its face, the assignees, before any lien of creditors had accrued, released and reconveyed to the assignors all the property embraced in the assignment, and a new assignment was executed by the assignors, free from the objectionable conditions contained in the former. The vice- chancellor was of opinion, that since the first assignment was voidable and not void, it was capable of confirmation, and that the re-assignment and second conveyance transferred the prop- erty to the assignees divested of the objectionable features in the first assignment. The decision is rested upon the ground that creditors had not accepted the first deed, nor had their rights at- tached under it. This case was followed and approved by the chancellor iu Mills v. Argall, 6 Paige, 577. Upon strict principles of law it is diflBcult to see how these de- 362 OENERAL ASSIGNMENTS. [CH. XVI. cisions can be sustained. The first conveyance in each case was sufficient to convey a title good as against the assignor, upon the conditions contained in the assignment. The assignee, having accepted the trust, had but one duty to perform, and that was to carry out the provisions of the instrument. A re-conveyance by him to the assignor was in direct subversion of the duties he had assumed, and in violation of the trust ; that it was made with the ulterior object and expectation of receiving back a better convey- ance from the assignor, did not make it any the less a violation of duty. Such a conveyance, in contravention of the trust, is, under the statute (1 R. S. 730, § 65), absolutely void. And see Briggs V. Dmis, 21 N. Y. 574 ; Movan v. Hays, 1 Johns. Ch. 339. In Whitcomb v. Fowle {supra), it is said that these cases es- tablish the principle that, as between the parties to it, the as- signment is binding and revocable at their pleasure. But no case goes to the extent of holding that such a revocation could in any way impair the rights of creditors. When the assignment is void, and is therefore inoperative, as where a limited copartnership executes an assignment with pref- erence which by statute is declared void (1 R. S. 766, §§ 20, 21), no title passes, and a subsequent valid assignment may be made by the assignors. Nat. Bank of Troy v. Scriven, 70 Supm. Ct. (63 Hun), 375. In Schioartz v. Sautter, 103 N. Y. 683 ; affi'g 48 Supm. Ct. (41 Hun), 323, it was held that the assignment was void because the statute was not complied with respecting the written assent of the assignee to the assignment, and that the subsequent assignment was valid. In Sutherland v. Bradner, 116 N. Y. 410 ; affi'g 46 Supm, Ct. (39 Hun), 134, where the assignment directed the assignee, after payment of certain preferences, to return the assigned prop- erty to the assignors, and the assignors subsequently executed another assignment which directed the distribution of the surplus among the general creditors, it was held that the first assignment was good between the parties, that the assignor had nothing therefore that he could convey under the second assignment, nor was it competent for the court to correct the first assignment on the ground of mutual mistake, so as to prejudice the subse- quently acquired rights of creditors. Warner v. Jaffray, 96 N, Y. 248, 255. §§ 285, 286. J REVOCATION OP ASSIGNMENT. 363 An assignment for creditors by a firm not executed in conform- ity to law, in that it was not acknowledged by the assignors, and that the assignee's acceptance was not acknowledged by him, does not work a dissolution of the firm so as to render ineffectual a subsequent assignment, Smedley v. Smith, 15 Daly, 421. § 285. Revocation of the assignment. — Nor can the assign- ment be revoked by the act of the assignor without the concur- rence of all the parties to the instrument. In England, where a different rule prevails in reference to the implied assent of credit- ors to a deed of assignment, it has been held that such instru- ments are revocable by the grantor, until there has been actual acceptance by creditors, or acts tantamount to an acceptance. Oarrard v. Lauderdale, 3 Sim. 1 ; Page v. Broom, 4 Russ. 6 ; Acton V. Woodgate, 2 M. & K. 492 ; Griffith v. Bicketts, 7 Hare, 299 ; iSmith v. Hurst, 10 Hare, 30 ; s. c. 15 Eng. L. & Eq. 520 ; Law v. Bagwell, 4 Dr. & War. 398 ; Browne v. Ca/oen- dish, 1 Jones & LaT. , 606 ; Oibbs v. Glamis, 11 Sim. 584 ; Baven- shaw V. Hollier, 7 Sim. 3 ; Simvionds v. Palles, 2 Jones & LaT. 489 ; Walwyn v. Coutts, 3 Sim. 14. But in this CQuntry, as we have seen {ante, § 108), the rule is otherwise. § 286. Reformation of assignment. — In Van Winhle v. Armstrong, 41 1^. J. Eq. 402 ; s. c. 4 Cent. R. 53, suit was brought to rectify an assignment made in New York, so as to insert words of inheritance under which real estate in New Jersey would pass. Where the assignment contains a mere clerical error, but the true meaning and intent cannot be doubted, the court must give effect to the instrument according to its true intent. In such a case it is not necessary that there should be a reformation of the instrument decreed. Smith v. Bellows, 3 State R. 305. CHAPTER XVII. FOREIGN AND DOMESTIC ASSIGNMENTS. § 287. In general. — An assignment executed within this State may include lands or chattels, real or personal, situated in another State, and in like manner, assignments executed elsewhere may embrace various classes of property within this State. The ques- tion at once arises, by what law are these transfers to be governed. The assignment may "be made in one State, the property assigned may be situated in another, the litigation may arise in one or the other of these States or in a third State, and the parties may have their domicile in still a different State. The inqiiiry there- fore is whether the law of the place where the assignment is made, or of that where the property is situated, or of that where the litigation arises, or of that where the one or the other of the parties has his domicile, is to control. These systems of law are denominated the lex loci contractus, the lex rei sitce, the lex fori, and the lex domicilii. Much learning and great research have been applied to the elucidation and determination of the law governing the general principles of jurisprudence upon which the questions thus presented depend. The purpose of this chap- ter is to present an outline of the judicial decisions in this coun- try, which control the courts in determining the questions pre- sented to them for adjudication upon questions of foreign and domestic assignment. In the first place, it is to be observed that the laws of a State can have, of their own vigor, no extra-terri- torial effect. So far as the laws of any State are regarded, out- side of the jurisdiction of that State, it is simply by force of inter- national or inter- State comity. This comity is not extended to all kinds of transfers, nor to transfers of all species of property. For the present purpose it is necessary at the outset to observe the distinction between bankrupt assignments which are the re- sult of statutory proceedings, and voluntary assignments which rest on the consent of parties. § 288.] BANKRUPT ASSIGNMENTS. 365 § 288. Bankrupt assignments. — With regard to transfers under foreign bankrupt and insolvent law, there is in this country little, if any, conflict of authority. It appears to be settled law that a conveyance by operation of proceedings under foreign bankrupt and insolvent laws, cannot affect property outside of the State or country in which the law is enacted. Story on Conf. of Laws, §§ 410, 4:11 ; Hibernia Nat. Bank v. Lacombe, 28 Supm. Ct. (21 Hun), 166 ; affi'd, 84 N. Y. 367. See Cole v. G%mningham, 133 U. S. 107, 129. This principle has been most frequently applied in contests between assignees claiming under a foreign bankrupt assignment and resident creditors claiming under attachment proceedings, and in such cases it has been held in this State, and in most, if not all of the United States, that the title acquired under the foreign bankrupt or insolvent proceedings, " will not prevail against the rights of attaching creditors where the property is situated. Ha/rrison v. Sterry, 5 Cranch, 289 ; Ogden v. Satmders, 12 Wheat. 213 ; Plestoro v. Abraham, 1 Paige, 236 ; Holmes v. Hemsen, 20 J ohns. 229 ; Soyt v. Thomp- son, 5 N. Y. 320 ; Boyt v. Thompson's Ex\, 19 N. Y. 207, 226 ; KelVy V. Orapo, 46 IST. Y. 86 ; rev'd, 16 Wall. 610 ; Hibernia Nat. Bh. V. Lacombe, 84 N. Y. 367, 385 ; Osborny. Adams, 18 Pick. 245, 246 ; Felch v. Bugbee, 48 Me. 9 ; Rhawn v. Pearce, 110 111. 350 ; Smith's Appeal, 104 Pa. St. 381 ; Weider v. Maddox, 66 Tex. 372 ; Walters v. Whitloch, 9 Pla. 86 ; Cat- lin V. Wilcox Silver Plate Co., 123 Ind. 477 ; 2 Kent's Com. 405, 408. Whatever be the true ground of the rule, it is now to be re- garded as definitely settled. See the reason of the rule stated in CojUn V. KelUng, 83 Ky. 649, 653. Elaborate discussions of the subject will be found in the cases above cited, and especially in the leading cases of Blake v. Williams, 6 Pick. 286 ; Holmes v. Remsen, 4 Johns. Ch. 460 ; s. c. 20 Johns. 229 ; Milne v. Moreton, 6 Binn. (Pa.) 353 ; and in Story on Conf. of Laws, § 410, et seg. So far has the rule been extended as to per- mit even a resident of a foreign State to obtain an attachment which will be good as against a subsequent bankrupt assignment in his own State. South Boston Iron Go. v. Boston Locomo- tive Wm'hs, 51 Me. 585; see Johnson v. Hunt, 23 Wend. 87; Hibernia Nat. Bank v. Lacombe, 28 Supm. Ct. (21 Hun), 166 ; 366 GENERAL ASSIGNMENTS. [cH. XVn. affi'd, 84 N. Y. 367 ; see Wam,er v. Jafrmj, 37 Supm. Ct. (30 Hun), 326 ; affi'd, 96 N. Y. 248. In Ba/rth v. Backus (140 N. Y. 230) is found the latest enun- ciation of the principle ; and in Vanderpoel v. Om'man (Id. 563, 568) the Court of Appeals stated that it refused to recognize the validity of the assignment in Barth v. Backus because it was not the voluntary act of the debtor, but drew all its virtue from the law of Wisconsin, which was in effect a bankrupt law. See Rey- nolds v. Adden, 136 U. S. 348, 355 ; Paine v. Lester, 44 Conn. 196, 203. In Barth v. Backus, supra, it is said that the cases in this State since Holmes v. Bemsen (4 Johns. Ch. 460), in which the chancellor sought to maintain the English doctrine on the subject, have uniformly sustained the rights of domestic-attaching credit- ors against a title under a prior statutory assignment in another State or country, the several States of the Union being treated for this purpose as foreign to each other. The fact that the conveyance made in the course of such for- eign bankrupt or insolvent proceedings is executed by the debtor himself, and not by an officer of the court, is not significant, if in point of fact it is merely ancillary to the legal proceedings. Hutcheson v. Peshine, 16 N. J. Eq. 167 ; Holmes v. Bemsen, 20 Johns. 229, 254 ; Dunlajp v. Rogers, 47 N. H. 281 ; Paine v. Lester, 44 Conn. 196 ; May v. Wannemacher, 111 Mass. 202 ; see article in Am. Law Review, vol. xv., pp. 251, 259. In Matter of Accounting of Waite, 99 N. Y. 433, 448, overruling MosseZman v. Caen, 34 Barb. 66 ; s. c. 4 T. & C. 171 ; and reviewing Abraham v. Plestoro (3 Wend. 538), Wil- litts V. WaiU (25 N. Y. 577), Johnson v. Hunt (23 Wend. 87), and Raymond v. Johnson (11 Johns. 488), the court deduces the following rules : " (1) The statutes of foreign States can in no case have any force or effect in this State ex /pro- pria vigore, and hence the statutory title of foreign assignees in bankruptcy can have no recognition here solely by virtue of the foreign statute. (2) But the comity of nations, which Judge Denio, in Petersen v. Chemical Bank (32 N. Y, 21), said is part of the common law, allows a certain effect here to titles derived under, and powers created by the laws of other countries, and from such comity the titles of foreign statutory assignees are § 289.] FOREIGN BANKRUPT ASSIGNEE. 367 recognized and enforced here, when they can be, without in- justice to our own citizens, and without prejudice to the rights of creditors pursuing their remedies here under our statutes ; provided, also, that such titles are not in conflict with the laws or the public policy of our State. (3) Such foreign assignees can appear, and, subject to the conditions above mentioned, maintain suits in our courts against debtors of the bankrupt whom they represent, and against others who have interfered with, or withheld the property of the bankrupt." In Phslps V. Borland, 103 N. Y. 406, it was held that a for- eign discharge in bankruptcy is not a defense to an action bi'ought here upon a debt or obligation of the bankrupt by a citizen who was not a party to and did not appear in the bankruptcy proceed- ings, although such debt or obligation was contracted under the law of the jurisdiction of the bankruptcy court, and was to be there paid. A note to this case, with a collection of authorities, will be found in 5 Cent. R. 424. The statute of Minnesota provides for the making of assign- ments which shall operate for the benefit of such creditors only as shall file releases of their debts. This act was declared not to be unconstitutional as to debts contracted after its passage, and it was also held in effect that this was not an insolvent law. Denny V. Bennett, 128 U. S. 489. In ]!few Jersey it is provided by statute that creditors who come in and share under an assignment are barred from subse- quently maintaining actions against the debtor upon their claims. This statute was before the court in Boese v. King, 78 N". Y. 471 ; affi'd 108 U. S. 379, where it was held that this provision was in the nature of an insolvent law, and was suspended by the existence of a national bankrupt law. § 289. Right of foreign bankrupt assignee to sue.— It was formerly held in this State that under general principles of com- ■ ity, assignees of a foreign bankrupt were entitled to sue for and recover debts due to the bankrupt within this State, except when the claim of the assignees came into conflict with creditors in this State claiming under attachments against the bankrupt's prop- erty. Bird V. Pierpont, 1 Johns. 118 ; Bird v. Caritat, 2 Id. 368 GENERAL ASSIGNMENTS. [oH. Xvn. 342 ; Holmes v. Eemsen, i Johns. Ch. 460 ; s. c. 20 Johns. 229, 267. The assignee sued as the representative of the bankrupt. After the case of Abraham v. Plesloro (3 Wend. 538), this doc- trine was doubted if not denied. Johnson v. Hunt, 23 Wend. 87, 91 ; Raymond v. Johnson, 11 Johns. 488 ; Mosselman v. Caen, 34 Barb. 66 ; Hoyt v. Thompson, 5 N". T. 320, 351 ; WilliUs v. Waite, 25 N. T. 577 ; s. c. 13 How. Pr. 34 ; see the cases col- lected and discussed by Barrett, J., in Hibernia Nat. Bank v. Lacomle (84 K. Y. 367). Though Shipman, J., in Hunt v. Jackson (5 Blatchf. 349), expressed the opinion that these deci- sions do not go to the extent of prohibiting assignees, under for- eign bankrupt laws, from suing in the courts of this State. See Hooper v. Tuckermam, 3 Sandf. 311. In Matter of Waite, 99 JST. Y. 433, the question of the right of a foreign bankruptcy assignee to appear in our courts was fully discussed on the authorities, and the conclusion was reached that neither Abraham, v. Plestoro, 3 Wend. 538, nor Johnson v. Hvjht, 23 Wend. 87, 91, had directly passed upon the question. The case of Mosselman v. Caen, 34 Barb. 66 ; s. c. 4 T. & 0. 171, was overruled, and the conclusion was reached which is stated in the third proposition cited in the preceding section. In Bank v. MoLeod (38 Ohio St. 174) is an elaborate discus- sion of the right of a receiver appointed in Kentucky to sue in the courts of Ohio, and such right was recognized and upheld through the county, no Ohio creditor making any claim and no policy of Ohio being contravened. The attaching creditor in this case was a citizen of Kentucky. In Rhawn v. Pearce (110 111. 350) a different result was reached, the court holding that foreign trustees in insolvency appointed by a court in Pennsyl- vania, pursuant to statutory enactment of that State, could not enforce their claim .to property in Illinois even as against an at- taching creditor resident in Pennsylvania. § 290. Voluntary assignments. — Voluntary assignments stand upon entirely different principles from involuntary bank- rupt or insolvent assignments. Hoyt v. Thompson, 5 N. Y. 320, 352. The latter are compulsory, and operate in invitum / the former are the voluntary act of the assignor, and have such force and § 291. J REAL ESTATE. 369 effect as is given in law to all contracts. Story on Confl. of Laws, 8th ed. § 411. "It is therefore admitted," says Justice Story, in the section cited, "that a voluntary assignment by a party, according to the law of his domicile, will pass his personal estate, whatever may be its locality, abroad as well as at home." But this statement is greatly qualified by the learned writer cited, and, as we shall see, is sustained by the authorities only to a limited extent.' A distinction is to be taken at the outset as to conveyances of real as distinguished from conveyances of per- sonal property. § 291. Real estate. — It is said by Mr. Justice Duer, in Nichol- sons. Leavitt (4 Saadf. 252, 276), that, " If it is possible to state any legal proposition or maxim that has never been the subject of dispute or doubt, but which is proclaimed and established by the unbroken and unvarying harmony of the decisions in Eng- land and the United States, it is, that the validity of every dis- position of lands, whether the disposition be absolute or qualified, whether it passes an estate or merely imposes a charge, depends exclusively upon the municipal law of the country or State in which the lands are situate. (Citing Story's Confl. of Laws, § 428.) It is of no consequence where the instrument containing the disposition is made or delivered, nor where the parties reside, since in all cases it is neither the ' lex loci contractus nor the lex domicilii, but solely the lex loci rei sitae ' that governs the con- struction ; and so universal is the rule, that neither in the law of England nor in our own (although it seems to be otherwise in some foreign countries) has a solitary exception ever been ad- mitted." In support of a rule which can be stated thus absolutely and without qualification, it will be necessary to refer only to a few of the principal authorities. Bonati v. Welsch, 24 N. Y. 157 ; Slatter v. Odrroll, 2 Sandf. Ch. 573 ; Hutcheson v. Peshine, 16 K. J. Eq. 167 ; McOoon v. Scales, 9 Wall. 23 ; Oslorn v. Adams, 18 Pick. 245 ; Loving v. Pairo, 10 Iowa, 282 ; King v. Olass, 73 Iowa, 205 ; Lucas v. Tucker, 17 Ind. 41 ; Heyer v. ' See note on the effect to be given to foreign voluntary assignments. Aakm. v. La Gygne Ex. Bh. (83 Mo. 366), 34 Am. L. Reg. 403. 24 370 GENEEAL ASSIGNMENTS. [CH. XVII. Alexander, 108 111. 385 ; Hodgers v. AUen, 3 Ohio, 488 ; Nel- son V. JBridport, 8 Beav. 547 ; Brodie v. Barry, 2 Ves. & B. 127, 131 ; Curtis v. Hutton, 14 Ves. 537 ; Birtwhistle v. Var- dill, 9 Bligh, N. R. 32 ; Harrison v. Harrison, 42 L. J. Chan. 495. But while this rule is admitted in its full force, it does not fol- low that because an assignment executed in this State covers real property situated in another State, that therefore it cannot be assailed here on the ground that the instrument was in fraud of citizens here, or that it was obtained fraudulently from the grantor. D''lvernois v. Leavitt, 23 Barb. 63, 80 ; see Nichol- son V. LeaA}iU, 4 Sandf. 252, 276, 277. An apparent if not a real exception to the rule so broadly stated by Justice Duer is to be found in the case of Thurston v. Rosenfield, 42 Mo. 474. In that case the assignment was exe- cuted in New York, covering real estate situated in Missouri. The assignment was good in New York but bad under the Mis- souri law, although executed and acknowledged in compliance with that law. It was held in Missouri that the assignment was good as against an execution creditor who was a resident of the State of New York. There is no distinction between general assignment and other conveyances of real property. If the assignment or ancillary instruments are sufficient to pass title, the conveyance will be sustained with like eifect as though it had been made for any other purpose. § 292. The remedy is governed by the forum. — Another proposition which is well established, and which helps to clear the general subject of some perplexity, is that with regard to the remedies, the methods of procedure, all the machinery of the law — the place of trial governs. Lodge v. Phelps, 1 Johns. Cas. 139 ; Ruggles v. Keeler, 3 Johns. 263 ; Sooville v. Can- did, 14 Johns. 338 ; Andrews v. Herriot, 4 Cow. 508, and note ; Speed v. May, 17 Penn. St. 91 ; Jones v. Taylor, 30 Vt. 42, 48 ; Harrison v. Sten'y, 5 Cranch, 289 ; Smith v. Atwood, 3 McLean, 545. § 293. Voluntary assignments of tangible personal prop- § 293.] VOLUNTAItY ASSIGNMENTS. 371 erty — General rule. — It is with reference to corporeal personal property that the greatest conflict of opinion exists, as to whether it is to be governed by the law of the place where it is situated or by the law of the place of the contract of transfer. Speak- ing of personal property, Mr. Justice Story says (Story on Confl. of Laws, 8th ed., § 383) : " That the laws of the owner's domicile should in all cases determine the validity of every transfer, aliena- tion or disposition made by the owner, whether it be intsr vivos or be post Tnortem. And this is regularly true, unless there is some positive or customary law of the country where they are situate, pro- viding for special cases (as is sometimes done), or from the nature of the particular property, it has a necessarily implied locality." Dr. Wharton, in liis work on Conflict of Laws, while admit- ting that until recently the view expressed by Justice Story was the prevailing one, insists that the rule has of late undergone a change, and he undertakes to formulate the true proposition in reference to what is commonly known as personal property, as follows : " Movables, when not massed for the purposes of suc- cession or marriage transfer, and when not in transit, or following the owner's person, are governed by the lex situs,'''' except so far as the parties interested may select some other law. Wharton on Confl. of Laws, 2d ed., § 311. It may safely be asserted, however, that the decisions of the courts in this country have been quite uniformly based upon the rule as stated by Judge Story, and the conflict of authority, in so far as it exists, arises from a want of uniformity in the appli- cation of the exception stated. Now, as to foreign voluntary assignments which do not conflict with the law of the place where the personal property is situated, it is in most States freely admitted that such conveyances operate to transfer the title to the assignee as against process in favor of resident creditors. Kelstadt v. Heilly, 55 How. Pr. 373, Van Brunt, J.; Moore v. Willett, 35 Barb. 663 ; Casleie v. Webster, 2 Wall. Jr. 131 ; Speed v. May, 17 Penn. St. 91 ; Zom v. Mills, 18 Penn. St. 185 ; Bholen v. Cleveland, 5 Mason, 174 ; Hoyt v. Thompson's ExW, 19 ISf. T. 207 ; Parsons v. Lyman, 20 N. Y. 103 ; Greene v. Mowry, 2 Bailey (S. C.) Law, 163 ; Smith v. Chicago (& JST. W. By. Co. 23 Wis. 267 ; Forles v. Scannell, 13 Cal. 242 ; Van Wyok v. Bead, 43 Fed. Kep. 716 ; Sortwel v. 372 GENERAL ASSIGNMENTS. [CH. XVII. JeweU, 9 Ohio, 180 ; SwAiK's Appeal, 104 Pa. St. 381 ; s. c. 117 Pa. St. 30 ; Cooh v. Van Horn, 81 Wis. 291 ; First Na- tional Bank v. Walker, 61 Conn. 154 ; Bank of the Yalley v. Oettinger, 3 W. Va. 309 ; Gregg v. Sloan, 76 Va. 497 ; Miller v. Kernaghan, 56 Ga. 155 ; Walters w. Whitlock, 9 Fla. 86 ; Bus- sell V. Tunno, 11 Eich. Law. (S. C), 303 ; Weider v. Maddox, 66 Tex. 372, 379. But this rule will not apply where the assign- ment is defective iu any particular declared to be essential by the law of the State where the property is situated, or where that law makes some act, recording, for instance, a condition precedent to the validity of the assignment. The lack of assent of the credit- ors, as required in Massachusetts, is an illustration of the former exception, and lack of actual notice of the assignment and failure to record, as required in Pennsylvania, of the latter, ^qq Faulk- ner V. Hyman, 142 Mass. 53 ; Steel v. Ooodwin, 113 Pa. St. 288 ; Bacon v. Home, 123 Pa. St. 452. There is a class of cases which disclaim the enforcement of the foreign voluntary assignment on any ground of comity, but up- hold it upon the ground that it not only does not conflict with the law of the situs, but conforms thereto as well as to that of the domicile or lex loci contractus. The following are illustra- tions : Train v. Kendall, 137 Mass. 366 ; Askew v. La Cygne Fxch. Bank, 83 Mo. 366 ; Palmer v. Mason, 42 Mich. 146, 152-153 ; Waiters v. Whitlock, 9 Fla. 86. There are decisions in Maine and Massachusetts which seem to place foreign voluntary assignments upon the same basis with foreign bankrupt assignments. Ingraham v. Geyer, 13 Mass. 146 ; Fox V. Adams, 5 Greenl. (Me.) 245 ; see also Borden v. Sumner, 4 Pick. 265 ; Blake v. Williams, 6 Id. 286 ; Fall River Iron Works Co. v. Croade, 15 Id. 11 ; 2 Kent's Com. 407 ; Pierce v. O'Brien, 129 Mass. 314. Generally courts which have refused to give effect to foreign assignments, valid where made, have placed their decisions upon the ground that such assignments were repugnant to some statu- tory or customary law of the State where they were sought to be enforced. It becomes important, therefore, to consider what is meant by the exception which prescribes that the principle of comity yields when the laws and policy of the State where the property is located has prescribed a different rule of transfer from that of the State where the owner lives. § 294.] CONTRAVENIKG THE LAW OF SITUS. 373 § 294. Assignments which contravene the law of the situs. — The exception to the law of transfer of personal prop- erty, if it be an exception, to wit, that a transfer, valid where made, will not operate upon personal property situated in a for- eign State where the transfer is repugnant to the laws of that State, is the more difficult of clear apprehension, because it has been expressed in such various forms of language. Thus Chan- cellor Kent (2 Kent's Com. 454) says : " The necessary inter- course of mankind requires that the acts of parties, valid where made, should be recognized in other countries, provided they he not contrary to good morals, nor repugnant to the policy and positive institutions of the State.''^ Judge Eedfield, in HanfordY. Paine (32 Vt. 442, 456), says : " In regard to general voluntary assignments for the benefit of creditors, it seems to be an admitted rule, that if valid, accord- ing to the laws of the place of the domicile of the assignor, they will have the effect to pass all the personal property of the as- signor, wherever situated, unless their operation is limited or re- strained by some local law or policy of the State where the same is situated." Speaking of the same rule of law, but in the case of a different class of transfers, Mr. Justice Walker says, in Mumford v. Canty (50 111. 370, 375) : " This rule" (the enforcement of for- eign contracts) " is, however, never adopted when it would con- travene our criminal laws, or would sanction vice and immorality, or is agavnst a positive prohibition of law. ^^ And in Guillander v. Howell (35 N. Y. 657, 659), Mr. Justice Peckham says : " What is injurious to the rights of the citizens where the property is situate should be the subject of positive legislation, and not left to the discretion of the courts ;' ' citing Story on Conf. of Laws, § 390. In Edgerly v. Bush, 81 N. Y. 199, 203, citing Green v. Yan Buskirh, 7 Wall. 139, Folger, Ch. J., states the rule thus: " Though a transfer of personal property, valid by the law of the domicile, is valid everywhere as a general principle, there is to be excepted that territory in which it is situated and where a differ- ent law has been set up, when it is necessary for the purpose of justice that the actual ot'^ws of the thing be examined." See Howard Nat. Bank v. Kvng, 1 Am. Insol. R. 461. 374 GENERAL ASSIGNMENTS. [OH. XVII. It will be seen from these citations, that the instances in which a judicial tribunal may refuse to regard a transfer of personal property made elsewhere as being repugnant to the laws or policy of the place where the property is situated, are not clearly defined. The decisions of different States of the Union are not in harmony as to what constitutes repugnancy to the law or policy of the situs, some holding that mere nonconformity to local statutes is such repugnancy ; others that the transfer must work injury to citizens of the State where the property is situated ; and still others that there must be some rule of natural equity or good morals ignored in order to constitute repugnancy. In some cases the application of the local statute is limited to assignments within the State making it, and it has been said that the policy of the State where the property is situated either favoring or discouraging such transfers affects the question. § 295. Contravention of the law of the situs— Attachment proceedings. — As against attachment proceedings by domestic creditors, the general rule is that the validity of the transfer must be determined by the law of the State where the property is situated rather than by that of the jurisdiction where the owner lives or where the transfer was made. Guillander v. Howell, 35 K. Y. 657 ; Green v. Van BusUrh, 5 Wall. 307, 312 ; Kel- ler V. Paine, 107 N. T. 83 ; Ilallgarten v. Oldham, 135 Mass. 1 ; O'Neil V. Fagle, 15 State E. 358. Mr. Justice Holmes states the rule on Ilallgarten v. Oldham, supra, as follows : " When a sale, mortgage, or pledge of goods within the jurisdic- tion of a certain State is made elsewhere, it is not only compe- tent, but reasonable, for the State which has the goods within its power to require them to be dealt with in the same way as would be necessary in a domestic transaction, in order to pass a title which it will recognize as against domestic creditors of the ven- dor or pledgor." In Guillander v. Hmoell (35 N. Y. 657 ; s. c. 6 Am. Law Eeg. [N. S.] 522 ; see note, p. 527), where an assignment was made in New York, containing preferences, and the assignors had certain personal property in New Jersey covered by the as- signment, which property was attached by the defendants, who were creditors residing in New Jersey, and sold in satisfaction of § 295. J CONTRAVENING THE LAW OP SITUS. 375 their claims, in an action brouglit in this State against the de- fendants for the detention and conversion of the property, it having been shown that an assignment giving preferences was void in ]S"ew Jersey by the laws of that State, it was held that the assignment was ineffectual to convey the personal property situated in New Jersey, although valid under the laws of this State. The case of Van BushirTc v. Warren (34 Barb. 45 Y ; s. c. 13 Abb. Pr. 145 ; affi'd, 2 Keyes, 119 ; 4 Abb. Dec. 457 ; rev'd on appeal to U. S. Supm. Ct. as Oreen v. Van Buskirh, 5 "Wall. SOY ; Y Wall. 139 ; s. c. 38 How. Pr. 52), which Avent through all the courts, is an important and instructive case. The facts were as follows : One Bates, who lived at Troy, New Torii, and owned certain iron safes in Chicago, 111., in order to secure an existing indebtedness to Van Buskirk and others, executed and delivered, in the State of New York, a chattel mortgage on the safes. Two days after this, Green, also a creditor of Bates, sued out of the proper court of Illinois a writ of attachment,' caused it to be levied on the safes, got judgment in the attachment suit, and had the safes sold in satisfaction of his debt. At the time of the levy of the attachment the mortgage had not been recorded in Illinois, nor had the attaching creditor notice of its existence. The mortgagees subsequently sued Green in New York for tak- ing and converting the safes. He defended the taking and con- version under the Illinois attachment proceedings, but judgment was nevertheless rendered against him in the lower court, which was affirmed on appeal to the Court of Appeals, but reversed in the Supreme Court of the United States. The decisions of the State courts were placed upon the ground that all the parties to the transaction being residents of the State of New York, the transfer was to be governed by the law of the owner's domicile, and that therefore Bates, at the time of the attachment, had no property in the safes upon which the suit could operate, and no title could be acquired under it. It should be observed that under the Illinois statute, mortgages on personal property have no validity against the rights and interests of third persons with- out being acknowledged and i-ecorded, unless the property be delivered to and remain with the mortgagee. The Supreme Court of the United States affinned its jurisdic- 376 GENERAL ASSIGNMENTS. [CH. XVII. tion (5 Wall. 307), to entertain an appeal ander the constitu- tional provision that fall faith and credit shall be given in each State to the public acts, records and judicial proceedings of every other State, and consideriug the question upon its merits, decided that the law of the State of Illinois having been shown to be such that no title to the personal property passed under the mort- gage as against creditors by reason of the want of delivery of the property, and that the lien of the attachment proceedings was therefore valid, the full faith and credit required by the consti- tution to be given to the judicial proceedings of other States re- quired the New York courts to respect the title of the attachment creditor in Illinois. Speaking of the ground on wliieh the decision in the State court was placed, Mr. Justice Davis makes use of the following observations (7 Wall. 139, 150) : " The theory of the case is, that the voluntary transfer of personal property is to be governed everywhere by the law of the owner's domicile, and this theory proceeds on the fiction of law that the domicile of the owner draws to it the personal estate which he owns, wherever it may happen to be located. But this fiction is by no means of univer- sal application, and as Judge Story says, ' yields whenever it is necessary for the purposes of justice that the actual situs of the thing should be examined.' " He adds, " We do not propose to discuss the question how far the transfer of personal property lawful in the owner's domicile will be respected in the courts of the country where the proparty is located and a different rule of transfer prevails. It is a vexed question, on which learned courts have differed ; but, after -all, there is no absolute right to have such transfer respected, and it is only on a principle of comity that it is ever allowed. And this principle of comity always yields when the laws and policy of the State where the property is located has prescribed a different rule of transfer with that of the State where the owner lives." See Hervey v. Rhode Island Loco. Works, 93 U. S. 664, 671, 672. In Warner v. Jaffray, 96 N. Y. 248, an assignment was made by debtors in this State who owned personal property situated in Pennsylvania. The statute of that State provides that assign- ments shall be recorded, and that a hona fide purchaser, mort- gagee, or creditor shall not be prejudiced by the assignment until recorded. Creditors obtained attachments on the personal prop- § 295. J CONTKAVENING THE LAW OE SITUS. 377 erty in Pennsylv^ania, and an action -was brought by the assignee against such creditors to restrain the prosecution of their suits. It was held that the property of the debtors in Pennsylvania was liable to attachment notwithstanding the assignment in this State, and that the courts of this State are bound to respect the lien of the attachment and to give full faith and credit to the judicial proceedings in which the attachments were obtained. In this State an assignment effectual to transfer the title to personal property, where it is made and not repugnant to our statutes or policy, will be sustained as against proceedings by at- tachments instituted by our own citizens {Nassau Bank v. Yandes, 51 Supm. Ct. [44 Hun], 55 ; affi'g s. c. sw5 nom. Nassau Bank v. Bitsinger, 5 State R. 309), or at the instance of a foreign cveAMor {Hilernia Nat. Bank v. Lacombe, 84 N. Y. 367). And such is the rule in most of the States, Ooflin v. Kelling, 83 Ky. 649 ; Johnson v. Sharp, 31 Ohio St. 611 ; Walter's v. Whitlock, 9 Fla. 86 ; West v. Tupper, 1 Bailey (S. C.) Law, 193 ; Greene v. Mowry, 2 Bailey (S. C.) Law, 163 ; Gregg v. Sloan, 76 Va. 497 ; Bank of the Valley v. Gettinger, 3 W. Ya. 309 ; First Nat. Bk. v. Walker, 61 Conn. 154 ; Cookr. Van Horn, 81 Wis. 291 ; Palmer v. Mason, 42 Mich. 146 ; Han- ford V. Paine, 32 Vt. 442 ; Noble r. Smith, 6 R. I. 446, 449 ; Paine v. LesUr, 44 Conn. 196, 203. In New Jersey it is distinctly held that a voluntary assignment made by a non-resident debtor, which is valid by the laws of the place where made, cannot be impeached in New Jersey with regard to property situated there by non-resident creditor. Bent- ley \. Whittemore, 19 N. J. Eq. 462 ; Moore v. Bonnell, 31 N. J. Law, 90 ; Receiver of State Bank of N. B. v. First Nat. Bk. of Plainfield, 34 N. J. Eq. 450 ; Van Winkle v. Armstrong, 41 Id. 402 ; Kimball v. Zee,iO N. J. Eq.403 ; Hoisted v. Straus, 32 Fed. R. 279. But domestic creditors may proceed in disregard of such assignment if in substantial respects it is inconsistent with the New Jersey statute. In Bentley v. Whittemore, supra, it is said (p. 470) : " The true rule of law and public policy is this : that a voluntary assignment made abroad, inconsistent, in substantial respects, with our statute, should not be put in execution here to the detriment of our citizens, but that, for all other purposes, if valid by the lex loci, it should be carried fully into effect." 378 GENERAL ASSIGNMENTS. [CH. XVn. In Blain v. Pool, 13 State E. 571, where an assignment with preferences was made in this State by debtors, one of whom owned real estate in New Jersey which was not taken possession of by the assignee, and was afterward conveyed by the debtor in discharge of firm debts, it was held that under the recent New Jersey decisions — Hentley v. Whittemore, and cases cited above — the assignment made here, although with preference, was valid to pass title in New Jersey, except as to citizens of that State, and that the doctrine of that State, as expressed in Yarnum v. Camp, 13 N. J. Law, 326, and Moore v. Bonnell, 31 N. J. Law, 90, had been modified by the later decisions. § 296. Contravening the law of the situs— Regulations as to the manner of making assignments. — When testing the validity of a foreign assignment under the law of the State where property has been attached we are confronted with the question whether the local law regulating the form and method of executing the assignment is to be applied to such foreign assignment. If not, then what are the funda- mental and determinative requirements of the local law which determine the validity of the foreign assignment ? As a general rule, the cases are in harmony that statutory regu- lations as to the mode of executing and administering assign- ments, such as the Assignment Act of this State, are intended to affect only assignments executed within the State or such as are made by residents of the State. Vanderpoel v. Gorman, 140 N. Y. 663 ; Ocherman v. Cross, 54 N. T. 29 ; Moore v. Battin, 14 State R. 191 ; Hanford v. Paine, 32 Vt. 442 ; Wilson v. Car- son, 12 Md. 54 ; Russell v. Tunno, 11 Rich. Law (S. C.) 303 ; Butler V. Wendell, 57 Mich. 62 ; Schroder v. Tompkins, 58 Fed. R. 672 ; SchulerY. Israel, 27 Fed. R. 851 ; Athertonv. Ives, 20 Fed. R. 894 ; Hoisted v. Straus, 32 Fed. R. 279 ; Birds- eye V. Underhill, 82 Ga. 142. The case of Barnett v. Kinney (147 CT. S. 476) turned on such a restriction of the statute of the Territory of Idaho. That statute provided that assignments not made according to its pro- visions did not bind creditors, and prohibited preferences. The assignment was made in Utah. It transferred personal property situated in Idaho, and preferred certain creditors. The Su- § 297.] CONTRAVENING THE LAW OF SITUS. 379 preine Court of Idaho Territory held the assignment invalid against an attacking creditor, a resident of Minnesota. The Supreme Court of the United States reversed the judgment and said the assignment was valid at common law and by the law of Utah, and that it was in contravention of no settled policy of the Territory of Idaho. In Pennsylvania the statute provides that unless the assign- ment is recorded as provided by the act, a hona fide purchaser, mortgagee, or creditor shall not be prejudiced by it until recorded. The Pennsylvania courts have held that this statute operates as to foreign assignments only in favor of residents of tliat State, and that non-residents of the State cannot proceed by attachment against property of a non-resident assignor, claiming that the assignment had not taken effect because not recorded. Philson v. Barnes, .50 Pa. St. 230 ; Bacon v. Borne, 123 Pa. St. 452 ; Steel V. Goodwin, 113 Pa. St. 288 ; Long v. Girdwood, 150 Pa. St. 413. § 297. Contravening the law of the situs — Statute of fraud- ulent conveyances. — Turning now from the cases in which a foreign assignment has been held invalid, because of some statu- tory prohibition relating to such instruments, to the cases in which the invalidity has been sought to be established by show- ing that the assignment, though valid where made, is invalid because fraudulent by reason of a construction placed upon the statute of fraudulent conveyances by the courts where the prop- erty is situated different from the construction adopted at the place where the assignment is made, V7e shall find that the cases are by no means so easy of reconciliation. The preponderance of authority, as well as the weight of argument, seems to be in favor of sustaining such transfers. Thus, in the Supreme Court of the United States, in a case elaborately argued, where the assignment was made in Rhode Island by persons residing there, conveying property a portion of which was situated in New York, and the deed of assignment contained reservations which, although valid in Rhode Island, would have rendered the conveyance void if made in New York, in a creditor's action brought in the Circuit Court of the United States in New York, it was held that the assignment, being valid 380 GENERAL ASSIGNMENTS. [CH. XVII. in Rhode Island, was sufficient to sustain the title in the assignees in 'New York. Livermore v. Jenches, 21 flow. (U. S.) 126. So in Baltimore d; Ohio E. E. Co. v. Glenn (28 Md. 287), where an assignment was made in Virginia by a corporation of that State, containing provisions which, under the statute of fraudulent conveyances as expounded in the State of Mary- land, would have rendered it void, but which were valid under the laws of the State of Virginia, the assignment was sustained in Maryland. The court recognized and acted upon the principle that if the deed was a legal instrument in Virginia, where it was made, it was so everywhere "unless it violates good morals or is repugnant to some law or policy of the State." And to the same general effect are Frazier v. Fredericks, 24 N. J. L. (4 Zab.) 162 ; Mowry v. Crocker, 6 Wis. 326 ; Law v. Mills, IS Penn. St. 185 ; Caskie v. Webster, 2 Wall. Jr. 131 ; Fuller V. Steiglitz, 27 Ohio St. 355. In Moore v. Willett (35 Barb. 663), where the assignment was made in North Carolina and contained a clause allowing the as- signees to sell on credit, and also to continue the business at their election, provisions which, as we have seen, would render the assignment, if executed here, fraudulent and void in an action brought here by the assignees to recover the possession of a portion of the assigned property levied upon by the sheriff under an execu- tion on a judgment obtained by a creditor in this State, it was held that the provisions in the assignment, good where it was executed, but rendering it void in this State, did not impair its validity here, and the title of the assignee was sustained. But in Eice v. Courtis (32 Vt. 460), where the assignment was made in New York and was valid under the laws of that State, but a portion of the property covered by it was in Vermont, and there was no change of possession of the property such as is re- quired by the local law of Vermont, as declared by its courts, it was held that the assignment was invalid as against a subsequent attachment in Vermont. In Ingraham v. Geyer (13 Mass. 146), the assignment was made in Pennsylvania, and was invalid under the common law of Massachusetts. The Massachusetts court refused to sustain it against a resident attaching creditor. This case was followed in Fall Eiver Iron Works Go. v. Croade, 15 Pick. 11 ; Fox v. Adams, § 298.J EEPUGKTANCr AND WON-CONFOEMITY. 381 5 Greenl. 245 ; see Rhode Island Cent. Bank v. Danforth, 14 Gray (Mass.), 123. In that State an assignment not assented to by creditors is void at common law. Edwards v. Mitchell, 1 Gray, 239 ; Russell v. Woodward, 10 Pick. 408. § 298. Distinction between repugnancy and mere non- conformity. — There is no coniiict in the cases respecting the invalidity of a foreign assignment sought to be enforced as to prop- erty in a State with whose laws the assignment is in direct conflict in an element made essential by the law of such State. Thus, in Massachusetts the assent of the creditors is an element without which the assignment is a nullity. This is the result of judicial decision in that State. In South Carolina assignments with pref- erences are by statute null and void. The statute of New Y"ork requires the preference of certain employees. In a suit in South Carolina certain creditors, citizens of New York and other States, attached real and personal property in South Carolina subsequent to an assignment, covering the same property for the benefit of creditors, made in New York in conformity to New York law and giving the preferences required by the New York statute. It was held that the assignment was void and that the attaching creditors acquired a lien. The court observed : " We do not see by what authority a court, called upon to administer the laws of this State, could undertake to declare that an assignment pro- viding for such preferences was good and valid, and give it just as full force and effect as if the legislature had made no such declaration. Surely the courts of this State cannot treat that as valid which the legislature has expressly declared shall be null and void." And the court fully conceded tlie force and existence of the general rule that the validity of sueli assignments is to be determined by the lex loci contractus. Ex parte Dickinson, In re Sheldon v. Blauvelt, 29 S. C. 453, 460. It is held in Georgia that mere non-conformity to the laws of that State not going to the essence of the transaction does not render the foreign assignment invalid as to property in that State ; but that it is only invalid when it violates the policy of the law. Birdseye v. Underhill, 82 Ga. 142. In Frank v. Bohbitt {155 Mass. 112, 116) the court prefaced its decision by remarking that there were no Massachusetts creditors 382 GENERAL ASSIGNMENTS. [CH. Xvn. whose interests were affected by the assignment, and that the question was wholly between non-residents living in two differ- ent States, and then held that the assignment with preferences, being valid in North Carolina, where it was made, was valid in Massachusetts. Such assignments are voidable in that State at the instance of the assignee. See Train v. Kendall, 137 Mass. 366. In Pennsylvania a statute requires the record of a foreign as- signment. If not recorded, and the attaching creditor have no actual notice of the assignment, he acquires a lien. But this statute is only for the protection of domestic creditors. There- fore, as to them they must have actual notice, or, in its absence, recording is made an essential to the validity of the assignment. But recording is a non-essential as to non-resident creditors. See Steel v. Goodwin, 113 Pa. St. 288 ; Bacon v. Home, 123 Pa. St. 452 ; Long v. Girdwood, 150 JPa. St. 413. In Minnesota mere non-conformity to statutory requirements not involving any substantial policy of the State will not invali- date a foreign assignment. In re Paige c& Sexsmith Lumber Co., 31 Minn. 136. And tliis is the rule in Maryland, South Caro- lina, Texas, Vermont, Connecticut, and perhaps in other States. Wilson V. Carson, 12 Md. 54, 76-78 ; Bait. <& Ohio R. Ji. Go. V. Glenn, 28 Md. 287, 321-323 ; West v. Tipper, 1 Bailey (S. C.) Law, 193 ; Bussell v. Tunno, 11 Rich. Law (S. C.) 303, 317 ; Welder v. Maddox, 66 Tex. 372, 377, 378 ; Hanford v. Paine, 32 Vt. 442, 459 : Atwood v. Protection Ins. Co., 14 Conn. 555. § 299. This rule as to preferences. — The validity of a for- eign voluntary assignment preferring creditors depends on more than one consideration. In a State where an assignment of that character is declared null and void, the preference is repugnancy. South Carolina is such a State. Ex parte Dickinson, In re Sheldon v. Blauvelt, 29 S. C. 453. Some States make the assignment void only to the extent of the preference, and uphold it in other respects. Such a State is Missouri. Bryan v. Brisiin, 26 Mo. 423. But see Thurston v. Rosenfield, 42 Mo. 474, et seq. In New- York the assignment is not void ; the statute operates only on the unlawful preference. § 300.J DISCRIMINATION IN FAVOE OF EESIDENTS. 383 CenbraL Nat. Bank v. Seligman, 138 N. Y. 435 ; Ahegg v. Bishop, 142 N. Y. 286. See ante, § 178. In Kentucky, Ohio, Michigan, Pennsylvania, and Connecticut the preference is not repugnancy ; but in Iowa the rule is different because of its statute. Atherton Co. v. Ives, 20 Fed. Rep. 894 ; Fuller v. Steiglitz, 2Y Ohio St. 355 ; Butler v. Wendell, 57 Mich. 62 ; Smith's Appeal, 117 Pa. St. 30 ; Moore v. Church, 70 Iowa, 208. And in Connecticut, which may be called one of the lib- eral States as opposed to tliose which favor their own citi- zens, the rule is doubtless the same. In Eghert v. Baker (58" Conn. 319) all the parties were non-residents ; the assignment was with preferences, and this would have rendered the assign- ment invalid if made there ; but the court held that preferences given by assignment made in another State and valid there does rwt contravene the policy of the State. As in other decisions of that State, already cited under proper heads, citizens of other States have all the rights of citizens of Connecticut^ — no more, no less ; the non-residence of the parties in Eghert v. Baker may be considered immaterial. In Massachusetts, New Jersey, and Illinois, though preferences are forbidden, yet assignments con- taining them are upheld when no resident creditor's interests are affected. To summarize, it may be stated that where a statute clearly shows what is the " policy" of a State by declaring cer- tain assignments void, the statute must be obeyed to the letter ; where the local statute makes unlawful only a particular provi- sion there is no contravention of the law so as to make the whole instrument void ; and where the local statute is a mere regula- tion and directory, not going to the essence of the transaction, mere non-conformity is not fatal. But it must always be borne in mind that certain States, in order to prefer their own citizens, make themselves exceptions to all rules. § 300. Discrimination in favor of residents. — It is now the settled law of New York that no discrimination is to be made between residents of that State and those of other States. The rule in Hihernia Nat. Bank v. Lacorribe (84 N. Y. 367) was reaffirmed in Barth v. Backus (140 JST. Y. 230, 239) ; and in Yan- derpoel v. Gorman (Id. 563, 573, 574) the court, through Peck- ham, J., very pertinently observes upon the liberal policy of the 384 GENERAL ASSIGNMENTS. [CH. XVn. State respecting the distribution of the assets of foreign and domestic corporations among foreign and domestic creditors. As to the States of Connecticut, the Virginias, South Carolina, Georgia, Florida, Texas, Kentucky and Ohio it will be seen, from the cases cited {supra), that there is no discrimination. In each of them a creditor of any other State has the same rights and must observe the same rules as a domestic creditor. The tendency, at least of Vermont, is the same way. See Hanford v. Paine, 32 Vt. 442. In Paine v. Lester (44 Conn. 196) it is said that the Constitution of the United States establishes the equality of citi- zens of each State under the laws and before the tribunals of every State. In Chafee v. Fourth Nat. Bank (71 Me. 514) it is said that a discrimination in favor of resident citizens is not un- constitutional. But it has been denounced as barbarous by Judge Seymour D. Thompson, of Missouri {Zuppann v. JBauer), 17 Mo. Ap. 678, 682, and substantially so pronounced by Chief Justice Redfield, of Vermont {Hanford v. Paine, supra). In ISIew Jersey, Massachusetts, Illinois, Pennsylvania, Maine, and some other States, the rule and spirit is illiberal toward citizens of other States, though a foreign voluntary assignment will be enforced in them if no domestic creditor is affected, and it is valid in the State where made, and this even though directly contrary to the positive law of the State. § 301. The Illinois rule. — The rule established by the deci- sions in Illinois is that a voluntary assignment by a non-resident which is valid by the laws of the assignor's residence and not in conflict with the statutes or policy of Illinois will not be enforced to the prejudice of residents of the State of Illinois. Residents of Illinois may under attachment proceedings levy upon property of the assignor situated in that State which has been transferred by a valid assignment executed without the State, although the assignment is in all respects in harmony with the requirements of the Illinois law. Consolidated Tank Line Co. v. Collier, 148 111. 259 ; Woodward v. Brooks, 128 111. 222 ; May v. First Nat. Bank, 122 111. 551 ; Reyer v. Alexander, 108 111. 385 ; Sheldon v. Wheder, 32 Fed. E. 773. This rule is not support- ed by argument based upon any infirmity in the assignment, or, as in Massachusetts and in other States, upon the theory that the § 302.] CITIZENSHIP OF THE PARTIES. 385 assignment does not become operative until accepted by credit- ors, but is placed upon the ground that " as a voluntary foreign assignment, valid in the State where made, is enforced in this State as a matter of comity, our courts will not enforce it to the prejudice of our citizens who may have demands against the as- signor. It is contrary to the policy of our laws to allow the prop- erty or funds of a non-resident debtor to be withdrawn from this State before his creditors residing here have been paid, and thus compel them to seek redress in a foreign jurisdiction." Wood- ward V. Jirooks, 128 111. 222, 227. The Illinois doctrine is severely commented upon in Zv/ppann v. Bauer, 17 Mo. Ap. 678, 682. On the other hand, the assignment, if valid where made, although it may contravene the laws of Illinois, will be enforced in favor of non-resident creditors, including creditors of the as- signor's domicile, so long as the rights of resident creditors are not affected. Gonsolidated Tamh L. Go. v. Collier, 148 III. 259, modifying the language of Wood/ward v, Broolcs, 128 111. 222, 227. Hence a preferential assignment executed in New York between residents of that State will be given efficacy in Illinois, although by the statute of that State preferences in assignments are declared void. The true rule is stated to be that laid down in Bentley v. Whittemore, 19 N. J. Eq. 462, 470, "that a voluntary assignment made abroad inconsistent in substantial respects with our statute should not be put in force here to the detriment of our citizens, but that for all other purposes if valid by the lex loci it should be carried fully into effect. May v. FirM Nat. BamJc, 122 111. 551. § 302. Where the parties are all subjects of the State in which the assignment is made. — As against citizens of the State where the assignment was made, the rule appears to hold without qualification, that an assignment, valid by the laws of the State in which it is made, is valid everywhere. Burrill on Assgts. 6th ed. § 283. Where questions as to extra-territorial property arise between foreign assignees and foreign creditors domiciled in the same State, the foreign laws to which such par- ties are subject will be upheld. Bentley v. Whittemore, 19 N. J. Eq. 462 ; rev'g s. c. 18 N. J. Eq. 366 ; Abraham v. Ples- 25 386 GENERAL ASSIGNMENTS. [CH. XVII. toro, 3 Wend. 540 ; s. c. svh. nom. Plestoro v. Abraham, I Paige, 236 ; Sanderson y. Bradford, 10 N. H. 260 ; Hall v. Boardman, 14 N. H. 38 ; Thurston v. Eosenfield, 42 Mo. 474 ; Burlock V. Taylor, 16 Pick. 335 ; Moore v. Bonnell, 31 N. J. Law, 90 ; Whipple v. Thayer, 16 Piek. 25 ; Martin v. Potter, II Gray, 37 ; Chafee v. Fourth National Bank, 71 Me. 514; s. c. 36 Am. R. 345. In Cunningham v. Butter (142 Mass. 47) it appeared that a resident of that State, having become embarrassed financiallj, suspended payment, and offered a compromise to his creditors. Pending the discussion of the proposition of compromise, a Massachusetts creditor assigned a claim against the debtor to a resident of New York, who thereupon commenced attachment proceedings in that State, and attached a debt due to the debtor. Subsequently the debtor was adjudged insolvent under the Mas- sachusetts Insolvent Law, and an action was brought by the as- signee to restrain the Massachusetts creditor from prosecuting the attachment proceedings in New York, and an injunction was granted accordingly. But when an assignment with preferences was made in New York, and the assignee, under an order of the court, made on notice to all the creditors, assented to the compromise of a claim due to the debtor, and the other contracting party, who was a receiver appointed in New Jersey, had become obligated to pay the composition, it was held that a New Jersey creditor could not, in the New Jersey courts, attach the claim due to the assignor and treat the assignment as void. Kimball v. Lee, 40 N. J. Eq. 403 ; s. c. 4 Cent. R. 332. § 303. Effect of assignee's possession. — This seems to de- pend altogether on the common or statute law of the State where it is sought to enforce the assignment. Pennsylvania makes actual notice of the assignment or the recording of it essential. These are usually made the equivalent of delivery everywhere. But the statute of Pennsylvania is only for the protection of domestic creditors. It has no application to citizens of other States. See Long v. Oirdwood, 150 Pa. St. 413 ; Steel v. Goodwin, 113 Id. 288 ; Bacon v. Home, 123 Id. 452. In South Carolina it has been held that an assignment made and § 304.J INJUNCTION AGAINST CEEDITOKS. 387 delivered in New Tork took effect from the delivery of the assign- ment in New York. West v. Tupper, 1 Bailey (S. C.) Law, 193. Such seems to be the rule in New York. Van Bushi/rh v. Wa/r- ren, 2 Keys, 119. In Texas no delivery is necessary. Weider v. Maddox, 66 Tex. 372. In Hamford v. Fwme (32 Vt. 442) the assignment was made in New York and conformed to its laws, but not to those of Vermont, as to recording. But the assignee had taken possession. It was held that he acquired title against attaching creditors. An assignment made in Missouri and mailed there to a citizen of Ohio was held to pass the title to the assignee without further ceremony. Johnson v. SJia/rp, 31 Ohio St. 611. In Barnett v. Kirvney (147 U. S. 476) the assignee took posses- sion prior to their seizure by the sheriff in Montana. The as- signment was held to prevail, but the court seems not to have adverted to the effect of the possession, and the influence of that fact on the mind of the court must be left to conjecture. This case of Ba/rnett v. Kinney is cited by the court in Schroder v. Tomp- kins (58 Fed. Rep. 672, 676), and the matter of possession taken by the assignee was adverted to by the court both as to Barnett v. Kinney and the case then under consideration ; but the signifi- cance of the possession was not otherwise indicated. In Rey- nolds V. Adden (136 U. S. 348, 354) the Supreme Court of the United States, in a case coming up from Louisiana, and citing cases from that State, observed that in Louisiana transfers of property by judicial operation in other States were invalid in Louisiana, adding, " at least until the legal assignee has reduced the property into possession, or done what is equivalent thereto." It seems to be the rule that possession by the assignee, lawfully obtained, will hide a multitude of defects or irregularities in a foreign assignment. § 304. Injunction against creditor of the State of the as- signor from proceeding in another jurisdiction. — The well- established rule that equity aims its remedies at the conduct of persons within its jurisdiction, and operates on the consciences of men, regardless of tlie locality of the property affected, has been made an instrument in the administration of domestic assignments. Where, to illustrate, the statutes or clearly defined policy of a State places all its citizens on equality in the distribution of an 388 GENERAL ASSIGNMENTS. [cH. xvn. insolvent's estate, and prohibit preferences if a citizen of that State goes into a foreign jurisdiction where there is property cov- ered by the assignment, and seeks by attachment or other legal proceeding to secure it to himself, thus destroying the equilib- rium established at his domicile, and refusing to abide by a law he has helped to make and is subject to, equity, having jurisdic- tion of his person, will, on a proper bill, restrain him from prose- cuting his remedy or suit in the foreign court. This action of the court is not placed on any ground of the extra-territorial force of laws, but on the ground that the laws of a State must be given i/ntra-territorial force as to all citizens within the jurisdic- tion and other persons temporarily sojourning there. Such injunction is held to be no interference with a foreign and inde- pendent tribunal or in the afiEairs of another State, but a rightful command to a citizen of the State of the/br«m which he is in duty and good conscience bound to obey. See article in 23 Central Law Journal., 268, entitled '''' Injunction to Restrain a Creditor'' s Proceedings in a Foreign Jurisdiction,^^ and citing many authorities. See also Cunningham v. Butler, 142 Mass. 47 ; Cole v. Cunningham, 133 U. S. 107 ; Wilson v. Joseph, 107 Ind. 490. In Cole V. Cunningham, 183 U. S. 107, the Supreme Court of the CTnited States elaborately reviewed numerous authorities, English and American, and fully sustained the exercise of this power by injunction as an instrument in the administration of insolvent estates assigned for creditors, and held it not in conflict with the constitution of the United States requiring full faith and credit to be given to judicial proceedings in other States. § 305. Choses in action.— With regard to debts and choses in action generally, since they can have no locality, they are said to follow the person, and pass by a general assignment executed by him, even though the persons owing the debts are foreign to the domicile of the assignor. Mowa/rd Nat. Bank v. King, 1 Am. Insol. R. 461 ; Cruillander v. Howell, 35 N. Y. 657 ; s. c. 6 Am. L. Reg. (U. S.) 522 ; and see the able note to this case at page 527 ; see criticism on this case, 15 Am. L. Review, 268 ; Caskie v. Webster, 2 Wall. Jr. 131 ; Speed v. May, 17 Penn. St. 91 ; NoUe V. Smith, 6 R. I. 446 ; Clark v. Conm,. Peat Co., 35 § 305.] CHOSES IN ACTION. 389 Conn. 303 ; Smith v. Chicago <& W. W. Ey. Co., 23 Wis. 267 ; Birdseye v. Underhill, 82 Ga. 142 ; Wharton on Oonf. of Laws, § 545 ; Walter's v. Whitloch, 9 Fla. 86, et seq. And the title •will pass to the assignee without notice to the assignor's debtor ex- cept only so far as the debtor may have dealt in good faith with the assignor. BecTcwith v. Union Bamk, 9 N. T. 211 ; Noble v. Smith, 6 R. I. 446 ; Wa/rren v. Copelin, 4 Mete. 594 ; see An- derson V. Yan Alen, 12 Johns. 343 ; Wilkins v. Batterman, 4 Barb. 47. If, by the laches of the assignee in leaving the debtor in ignorance of his claim, the debtor deals with the orig- inal creditor as if he were still his creditor, and thereby becomes prejudiced, it is the loss of the assignee and not of the debtor. Wohle V. Smithy supra / Holmes v. Bernsen, 4 Johns. Ch. 460 ; see Emerson v. Pat/ridge, 27 Vt. 8 ; Wa/rd v. Morrison, 25 Id. 693 ; Muir v. Schenck, 3 HiU, 228 ; Story on Conf. of Laws, § 396 ; Mowry v. Crocker, 6 Wis. 326. Upon the questioning of the situs of debts and choses in action, and the rule of comity in the enforcement of foreign voluntary assignments conveying debts and choses, see Yam, Wyck v. Bead, 43 Fed. Eep. 716 ; Walters v. Whitlock, 9 Fla. 86 ; Consoli- dated Tam,k Line Co. v. Collier, 148 111. 259. (In this case the rnle that debt have no sitnis except the owners is affirmed as to all people except citizens of Illinois.) Fuller v. Steiglitz, 27 Ohio St. 355 ; Means v. Hapgood, 19 Pick. 105 ; Moa^ v. Wam,- nemacher. 111 Mass. 202 ; Smith v, Chicago & N. W. By. Co., 23 Wis. 267 ; In re Dalpay, 41 Minn. 532 ; Sanderson v. Bradford, 10 N. H. 260 ; Hall v. Boardmam, 14 N. H. 38 ; Durdap v. Sogers, 47 N". H. 281 ; Atwood v. Protection Ins. Co., 14 Conn, 555 ; Paine v. Lester, 44 Conn. 196, 203 (a case of an involuntary transfer) ; Egbert v. Baker, 58 Conn. 319, 323 ; First Nat. Bank v. Walker, 61 Conn. 154, 156 ; BamJc of the Yalley v. OetUnger, 3 W, Va, 309 ; Oregg v. Sloan, 76 Va. 497 ; Princeton Mfg. Co. v. WhiU, 68 Ga. 96, 98 ; Birdseye v. Underhill, 82 Ga. 142. The case of Atnoood^. Protection Ins. Co. (14 Conn. 556, 562) is an important case. There is a full and able discussion of the sit/ws of choses in action. The court observed : " As to debts generally, there is no color for the idea that they are impliedly located in the State where the debtor resides. On the contrary, 390 GENERAL ASSIGNMENTS. [oH. XVII. they are now universally treated as having no dtiis or locality (which is in precise accordance with their nature, they being incorporeal, and therefore not susceptible of local position), and are deemed, in contemplation of law, to be attached to, and to follow, the person of the creditor." § 306. Ships at sea. — Property at sea or in transit passes by any valid conveyance made by the owner. Wharton Conf . of Laws, 2d ed., §356 ; Plestoro v. Abraha/m, 1 Paige, 236. Hence an assignment of a ship on the high seas passes title to the assignees, if the assignment is valid at the place where it is made. Moore v. Willett, 35 Barb. 663 ; Southern Bank v. Wood, 14 La. Ann. 561. And the same rule has been applied where the assignment was made under bankrupt proceedings. Thus, in Crapo v. Kdl/y (16 Wall. 610) an assignment of the debtor's property was made under the insolvent laws of Massachusetts. Among the assigned property was a ship which was at sea at the time of the assign- ment. Subsequently the vessel arrived at the port of New York, where she was attached by a creditor residing in that State, and the action was brought to determine with whom was the prior right. The Court of Appeals {Kelly v. Crapo, 45 N. T. 86) held that the title to the vessel did not pass to the assignee ; but this opinion was overruled in the Supreme Court of the United States upon the ground that the vessel, being a Massachusetts vessel, was to be deemed a portion of the territory of that State, and that the assignment by the insolvent court of that State passed the title to her in the same manner and with the like effect as if she had been physically within the bounds of that State when the assignment was executed. See People ex rel Pacific Mail 8. S. Co. v, Comrs. of Taxes, 58 N. Y. 242, 246. PART IV. THE ADMINISTRATION OF THE ASSIGNED ESTATE. CHAPTER XVIII. JURISDICTION OP COUNTY COURT AND COMMON PLEAS UNDER THE GENERAL ASSIGNMENT ACT OF 1877. § 307. In general. — Having heretofore discussed the various methods by which assignments for creditors may be made, both under the provision of the Code of Civil Procedure in reference to insolvent debtors, and also under the act of 1877 and the com- mon law in reference to general voluntary assignments, we come now to a consideration of the rights and duties of the assignee and of creditors growing out of the execution of such instru- ments. But before proceeding to the consideration of these matters in detail, it is proper to inquire into the extent aiid limit of the jurisdiction conferred upon the county court by the general as- signment act of 1877. § 308. Jurisdiction of county court. — The sections of the act of 1877, to which it is necessary to refer in this connection, are as follows : " Any proceeding under this act shall be deemed for all purposes, including review by appeal or otherwise, to be a proceeding had in the court as a court of generarjurisdiction, and the court shall have full jurisdiction to do all and every act relating to the assigned estate, the assignees, assignors and cred- itors, and jurisdiction shall be presumed in support of the orders 392 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XVIII. and, decrees therein unless the contrary be shown ; and after the tiling or recording of an assignment under this act, the court may exercise the powers of a court of equity in reference to the trust and any matters involved therein." Laws of 1877, c. 466, §25. ■ Under this section the court acts as a court of general jurisdic- tion in respect to the assigned estate and any matter involved therein. As to the management and control of the trust fund, the court has all the power of a court of equity, and the power of the court may be invoked by petition. Matter of Bonner^ 8 Daly, 75 ; see Matter of Nicholas, 22 Supm. Ct. (15 Hun), 317. This was otherwise under the act of 1860. Shipman's Peti- tion, 1 Abb. N. C. 406. The language of the statutory power conferred is very broad, and it has been held that where an assignee had by mistake paid over to a creditor certain of the proceeds of the assigned property, to which a preferred creditor was in fact entitled, the county court had power under the jurisdiction so conferred, upon petition of the creditor entitled to the fund and upon notice to the creditor receiving it, to order the latter to return the amount to the assignee, to be by him paid out as directed by the assign- ment. Matter of Morgan, 99 N. Y. 145 ; see this case com- mented on in Matter of Vnderhill, 117 N. Y. 471. But the county court has no power on petition of a party claiming prop- erty in the possession of the assignee to determine the claim by special proceeding ; the remedy of the claimant is by action. Matter of Potter v. Durfee, 61 Supm. Ct. (44 Hun), 197. It is also provided by a previous section, that " All orders or decrees in proceedings under this act shall have the same force and effect, and may be entered, docketed and enforced and ap- pealed from, the same as if made in an original action brought in the county court. And all proceedings under this act shall be deemed to be had in court. The said court shall always be open for proceedings under this act. The county judge, when named in this act, sTiall, in such proceedings, be deemed to be acting as the court." Laws of 1877, c. 466, §22; amended Laws of 1878, c. 318. In addition to the general powers conferred under these sec- §§ 309, 310.] JUEISDICTION OF SUPREME COURT. 393 tions, the act expressly authorizes the county court (the county judge when named in the act, in all proceedings under the act, is deemed to be acting as the court) to authorize the assignee to advertise for creditors to present claims (§ 4), to remove the assignee (§ 6), and to require and allow amendments to the in- ventory and schedules (§ 6), to require further security to be given by the assignee (§ Y), to continue proceedings on the "death of the assignee (§ 10), to compel an accounting and distribution of the assigned estate (§§ 11-21), and to order the examination of witnesses and the production of books and papers (§ 21), and to authorize the assignee to compromise and compound claims or debts belonging to the estate (§ 23). These various matters are made the subject of special examination in the succeeding chap- ters. § 309. Concurrent jurisdiction of Supreme Court. — By chapter 380, Laws of 1885, it is provided that " all powers, rights and duties conferred upon county courts and county judges by chapter four hundred and sixty-six of the Laws of eighteen hundred and seventy-seven, entitled ' An act in relation to as- signments of the estates of debtors for the benefit of creditors,' and by acts amendatory thereof and additional or supplemental thereto, are hereby also conferred upon and shall be exercised by the Supreme Court and the justices of the Supreme Court of the State of New York, concurrently with county courts and county judges. All applications under said acts made in the Supreme Court shall be made to the court, or a justice thereof, within the judicial district where the assignment is recorded, and all pro- ceedings and hearings under said acts had in the Supreme Court .upon the return of a citation shall be had at a special term of said court held in the county where the judgment-debtor resided at the time of the assignment, or in case of an assignment by copartners, in the county where the principal place of business of such copartners was at the time of such assignment." § 310. In case of disability of county judge.— The Code of Civil Procedure has provided for a continuance of special pro- ceedings in case of the disability of the county judge. "If the county judge is, for any cause, incapable to act in an 394 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XVIII. action or special proceeding, pending in the county court, or be- fore him, he mast make, and file in the office of the clerk, a cer- tificate of the fact ; and thereupon the special county judge, if any, and if not disqualified, must act as county judge in that action or special proceeding. Upon the filing of the certificate, where there is no special county judge, or the special county judge is disqualified, the action or special proceeding is removed to the Supreme Court, if it is then pending in the county court ; if it is pending before the county judge, it may be continued before any justice of the Supreme Court within the same judicial district. The Supreme Court, upon the application of either party, made upon notice, and upon proof that the county judge is incapable to act in an action or special proceeding pending in the county court, may, and if the special county judge is also in- capable to act, must, make an order removing it to the Supreme Court. Thereupon the subsequent proceedings in the Supreme Court must be the same, as if it had originally been brought in that court, except that an objection to the jurisdiction may be taken, which might have been taken in the county court. ' ' Code of Civ. Pro. § 342. It was held at special term of the Court of Common Pleas, that the Code of Civil Procedure does not apply to proceedings under the assignment act, and hence when the bond of any as- signee was approved by a judge of the Supreme Court it was held that such approval was a nullity, and that the assignee acted without lawful authority in disposing of the assigned estate. Matter of Robinson, 10 Daly, 148. But this was previous to the Laws of 1885, c. 380, conferring concurrent powers upon the Supreme Court (ante, % 309). § 311, Jurisdiction of Court of Common Pleas.—" In the city and county of New York all papers, except assignments, which by this act are required to be hereafter filed or recorded in the county clerk's office shall be filed or recorded in the office of the clerk of the Court of Common Pleas of said city and county ; and any judge of said court may exercise all the powers of a county judge for said county for the purposes of this act, and any act or proceeding commenced or returnable before, or instituted or ordered by, one of the judges of said court, may be §§ 313, 313.] FILING AND EECOEDING PAPERS. 395 heard, continued or completed, by or before any other of them." Laws of 18YY, c. 466, § 24 ; see Code of Ci,v. Pro. §§ 266, 267. The judges of the Court of Common Pleas were included in the term county judge, employed in the act of 1860 and its amendments ; and the jurisdiction conferred by those acts upon the county judge was rightfully exercised by the judges of the Court of Common Pleas, when the debtor resided in the city of N'ew York. In re Morgrni, 56 I^. T. 629. § 312. Concurrent jurisdiction in equity.— It will be ob- served that these powers, conferred upon the county court and Court of Common Pleas by this act, are those ordinarily exer- cised by courts of equity. And those courts still retain and may exercise their jurisdiction over the same matters. This act has not limited or abridged their powers. It has given a new and more expeditious remedy to creditors, but that remedy, upon familiar principles of construction, is cumulative and not exclu- sive. Scidmore v. Smith, 13 Johns. 322 ; Golden v. Eldred, 15 Id. 220 ; Piatt v. Sherry, 1 Wend. 236 ; Stafford v. Ingersol, 3 Hill, 38 ; Waterfard (& W. Turnpike v. I'eoj>le, 9 Barb. 161. So it has been held that the authority conferred upon the county court under this act, to entertain proceedings for an accounting is not exclusive. An action for an accounting in equity may still be brought in any court having equity jurisdic- tion. Schuehle V. Reimam,, 86 N. Y. 270 ; Hurth v. Bower, 37 Supm. Ct. (30 Hun), 151 ; Converseville Co. v. Ghamhersburg Woolen Go., 21 Supm. Ct. (14 Hun), 609 ; Noyes v. Wernberg, 15 Weekly Dig. 72 ; Matter of Cromien, 10 Daly, 41. § 313. Filing and recording papers under the act — Fees. — " The clerk of the court shall keep a separate book, in which shall be entered each case, the date and place of record of the as- signment, and a minute of all proceedings therein, under this act, with such particularity as the court shall direct by general order. He shall record therein at length the orders and decrees of the court, settling, rejecting or adjusting claims, and directing the payment of money, or releasing assets by the assignee, and removing or discharging the assignee and his sureties, and such other orders as the court shall direct by general order. The said 396 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XVm. clerk shall securely keep the papers in each case in a file by themselves, and shall be entitled to a fee of one dollar for filing all the papers in each case, and entering the proceedings in the minute book, and fifty cents, to be paid by the assignee, unless otherwise directed, for recording each order or decree required by this act or the general order of the court." Laws of 1877, c. 466, § 22 ; as amended by Laws of 1878, c. 318. " In the city and county of New York all papers, except as- signments, which, by this act, are required to be hereafter filed or recorded in the county clerk's office shall be filed or recorded in the office of the clerk of the Court of Common Pleas of said city and county." Laws of 1877, c. 466, § 24. CHAPTER XIX. THE INVENTORY, SCHEDULES AND BOND. § 314. In general. — The first step to be taken under the gen- eral assignment act, after the execution of the assignment, is the preparation of the inventory and schedules, and the assignee's bond. These matters, which in part devolve upon the assignor and in part upon the assignee, are properly to be considered be- fore entering at large upon the rights and duties of the assignee under the assignment. § 315. The inventory and schedules.— By the third section of the general assignment act of 1877, as amended, it is pro- vided as follows : " A debtor making an assignment shall, at the date thereof or within twenty days thereafter, cause to be made, and delivered to the county judge of the county where such assignment is re- corded, an inventory or schedule containing, " 1. The name, occupation, place of residence, and place of business, of such debtor. " 2. The name and place of residence of the assignee. " 3. A full and true account of all the creditors of such debtor, stating the last known place of residence of each, the sum owing to each, with the true cause and consideration there- for, and a full statement of any existing security for the pay- ment of the same. " i. A full and true inventory of all such debtor's estate at the date of such assignment, both real and personal, in law and in equity, with the incumbrances existing thereon, and of all vouchers and securities relating thereto, and the nominal as well as actual value of the same according to the best knowledge of such debtor. " 6. An affidavit made by such debtor, that the same is in all respects just and true. But in case such debtor shall omit, neg- 398 ADMINISTRATION OP ASSIGNED ESTATE. [CH. XIX. lect or refuse to make and deliver such inventory or schedule within the twenty days required, the assignee named in such as- signment shall, within thirty days after the date thereof, cause to be made, and delivered to the county judge of the county where such assignment is recorded, such inventory or schedule as above required, in so far as he can ; and for such purpose said county judge shall at any time upon the application of such as- signee, compel by order such delinquent debtor, and any other person to appear before him and disclose, upon oath, any knowl- edge or information he may possess, necessary to the proper making of such inventory or schedule. The assignee shall verify the inventory and schedule so made by him, to the effect that the same is in all respects just and true to the best of his knowledge and belief. But in case the said assignee shall be unable to make and file such inventory or schedule, within said thirty days, the county judge may, upon- application upon oath, showing such inability, allow him such further time as shall be necessary, not exceeding sixty days. If the assignee fail to make and file such inventory or schedule within said thirty days or such further time as may be allowed, the county judge shall require, by order, the assignee forthwith to appear before him, and show cause why he should not be removed. Any peraon interested in the trust estate may apply for such order, and demand such re- moval. The books and papere of such delinquent debtor shall at all times be subject to the inspection and examination of any creditor. The county judge is authorized by order to require such debtor or assignee to allow such inspection or examination. Disobedience to such order is hereby declared to be a contempt, and obedience to such order may be enforced by attachment. The inventory or schedule shall be filed by said county judge in the office of the clerk of said county in which said assignment is recorded." Laws of 1877, c. 466, § 3, as amended by Laws of 1878, c. 318, § 1 ; see Laws of 1860, c. 348, § 2 ; Laws of 1874, c. 600, § 1. § 316. Previous statutory provisions. — The act of 1860 (Laws of 1860, c. 348, § 2) provided that, at the date of the assignment or within twenty days thereafter, the debtor should make and deliver to the county judge of the county in which the § 317.] FILING INVENTORY AND SCHEDULES. 399 debtor resides at the date of the assignment, an inventory or schedule, precisely as required of an insolvent debtor under the two-thirds act {ante, § 23), with the additional requirement that he should state the value of the estate according to the best knowledge of such debtor. In 1874 (Laws of 1874, c. 600) the section was amended by providing that, in case the debtor omitted or refused to make and deliver the inventory specified, the assignment should not, for that reason, be invalid or inefit'ectual. It further provided that, in case of such refusal or neglect on the part of the as- signor, the assignee might, within six months after the date of the assignment, make and tile an inventory or schedule of all the property of the debtor which he might be able to find. The act of 1860, with the amendment of 1874, was repealed by the act of 1877, and an inventory and schedule, as required by the section cited above, were provided. It will be observed that the inventory or schedule differs in form, though not mate- rially in substance, from that required under the former act. The act of 1877, however, provided, that in case the inventory should not be filed within thirty days by the debtor or the as- signee, the assignment should be void. This provision was re- pealed by the amendatory act of 1878, and the removal of the assignee is now the only penalty for a failure to file the inven- tory and schedules. § 317. Failure to file inventory and schedules. — Under the provisions of the act of 1860, previous to the amendment of 1874, it was held that the making and delivery of the inventory and schedules within the time limited in the act was essential to the validity of the assignment. Juliand v. HaMone, 39 N. Y. 369 ; rev'g s. c. 39 Barb. 97 ; Eardmann v. JBowen, 39 IST. Y. 196 ; see FaircMld, v. Owyrme, 16 Abb. Pr. 23 ; s. c. 14 Abb. Pr. 121 ; contra, Van Vleet v. Slauaon, 45 Barb. 317 ; Eoa/as v. Cha/pin, 12 Abb. Pr. 161 ; s. c. 20 How. Pr. 289 ; Barbour v. Everson, 16 Abb. Pr. 366 ; Mead v. Worthington, 9 Bosw. 617. The act of 1874 (Laws of 1874, c. 600) provided that the omis- sion to make or deliver the schedule should not invalidate the assignment. It was the intent of that act to abrogate the rule laid down in JvMand v. Rathbone \siopra), and the provision 400 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XIX. allowing the assignee six months to file the schedules was not in- tended as a condition the breach of which would invalidate the assignment. Produce Bamk v. Morton, 67 N. Y. 199, 203 ; s. c. 40 N. Y. Super. Ot. (8 J. & S.) 328 ; Produce Bank v. Baldwin, 49 How. Pr. 277. The act of 1877 made another change, and provided that in case the inventory should not be made and filed within thirty days, the assignment should be void. Laws of 1877, c. 466, § 3. Under this act it was held that, after the failure to file the in- ventory within the time named, the assignee had no title to the assigned property, the assignment ceased to exist, and hence the court had no power to remove the assignee and appoint a new one in his place. Matter of Leahy, 8 Daly, 124. The statute, however, did not say that the assignment should be void ah initio, and hence it appears that until the thirty days had elapsed without the filing of the inventory the assignee had title to the property. In re Croughwell, 17 N'. B. R. 337. This provision was repealed by the amendatory act of 1878 (Laws of 1878, c. 318), and the section was put into the form cited above {ante, § 315). Since the passage of the Act of 1878 (Laws of 1878, c. 318) the assignment does not become inoperative by reason of a fail- ure to file the inventory. Warner v. Jaffray, 96 N. Y. 248 ; see Pratt v. Stevens, 94 Id. 387. A failure by the assignee to tile the inventory and schedule within thirty days, or such additional time as may be allowed, is ground for his removal. (See § 328.) § 318. Schedules which are not required by statute. — Pre- vious to the act of 1860 it was customary to draw the assignment with special reference to schedules of the debtor's pi'operty which were intended to be annexed, and with reference to schedules of creditors who were provided for in the assignment. This was merely, as a matter of convenience, to avoid the necessity for a description of the property and the designation of the creditors in the body of the assignment. There is no objection to pursu- ing such a course still. It will often be found convenient, where preferences are given to classes of creditors, to specify the vari- ous debts in their order of priority of payment, by schedules ^319. J INVENTORY PART OP ASSIGNMENT. 401 annexed to the assignment. Where schedules are thus used as a part of the instrument, we have already considered the effect of a failure to annex them at the time of the execution of the as- signment. See ante, §§ 130, 131, 135. The schedules so used as part of the assignment do not suppl}' the place of the inventory and schedule required by the act. The act requires that the assignment shall be recorded in the county clerk's office of the proper county. See ante, § 125. The inventory and schedules required by the act are to be deliv- ered to the county judge, and by him filed in the office of the clerk of the county in which the assignment is recorded. See ante, § 254. § 319. The inventory and schedules are part of the as- signment. — Although the inventory and schedule required by the act do not accompany the assignment, and are not referred to in it, and in fact may not be prepared until several days after the execution of the assignment, yet, when they are prepared and verified by the assignor, and delivered to the judge and filed as required by the act, they are to be regarded as part of the as- signment so far as they designate the creditors to be paid, and the amount of their debts. Roberts v. Vietor, 130 N. Y. 585 ; Eoherts v. BucUey, 87 Supm. Ct. (80 Hun), 58 ; Terry v. But- ler, 43 Barb. 395, 398 ; 8hultz v. Hoagland, 85 IST. Y. 464 ; Kavanaghv. Beohwiih, 44 Barb. 192 ; Talcott v. Hess, 38 Supm. Ct. (31 Hun), 282 ; Pratt v. Stevens, 94 N. Y. 387 ; rev'g s. 0. 33 Supm. Ct. (26 Hun), 229. Hence, when the schedule subsequently filed by the assignor contained fictitious debts, the assignment itself was regarded as providing for the payment of such debts, and was therefore held void. Terry v. Butler, sv/pra ; Talcott v. Hess, supra. The inquiry is whether the inrentory and assignment read together indicate that the assignor intended that debts set out are absolutely and unqualifiedly to be paid. If so the assignment is invalid if the debts so provided for are illegal or excessive. Roberts v. Vietor, 130 N. Y. 585. But the assignment may provide only for the payment of the lawful indebtedness of the assignor, and in that event it would seem that the mere insertion in the inventory of an indebtedness in excess of the amount due 36 402 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XIX. would not invalidate the assignment, since the assignee would be hound to pay only the sum actually due. See Webb v. Thomas, 49 State K. 4^2 ; and when the case of Roberts v. Vietor, supra, came before the court upon an appeal from a judgment on a retrial sub nom. Roberts y. Buckley, 87 Supm. Ct. (80 Hun), 58, the defendants were permitted to show that the amount of the debt was stated in the schedule at an excessive amount by excus- able mistake. With regard to the schedule of assigned property a somewhat diiferent question is presented. The statute imposes upon the assignor the duty of preparing a full and true inventory of all his estate. If he does not prepare it. it may be prepared by the assignee. When the assignor undertakes to make such a schedule any omission of property may indicate an intent to conceal assets for his own benefit or to prevent them from reaching the cred- itors through the assignee. It is true that all the debtor's prop- erty passes under the assignment to the assignee, whether it is detailed in the assignment or not (see awfe, §142), but the assignee's intent that it should be reserved and concealed may be evidenced by what he inserts or fails to insert in the schedule which he pre- pares. The omission of assets from the schedule prepared by the assignor has in several instances to which we have already referred been regarded as evidence of fraudulent intent on the part of the assignor in making the assignment. Pittsfield Nat. Banlc V. Tailer, 67 Supm. Ct. (60 llun), 130 ; Be Camp v. Marshall, 2 Abb. Pr. N. S. 373 ; Talcott v. Hess, 4 State E. 02, and on previous trial, 38 Supm. Ct. (31 Hun), 282 ; Fhil- lips V. Tncl-er, 14 State R. 120 ; Shultz v. Hoagland, 85 N. Y. 464. (See ante, % 238.) When the schedule of property was prepared and filed pur- suant to the act, and the assignor withheld from the schedule about $15,000 of his property, so as to enable the assignee to give the requisite security, and it also appeared that there was a direc- tion to pay one creditor a little over $2000, when, in point of fact, the actual indebtedness to such creditor was $11,400, the assignment was declared fraudulent and void. De Camp v. Marshall, 2 Abb. Pr. N. S. 373. See Taloott v. Eess, 4 State R. 62 ; Phillips v. Tucker, 14 State R. 120. In Pittsfield Nat. Bank v. Tailer, 67 Supm. Ct. (60 Hun), § 319. J INVENTOBY PART OF ASSIGNMENT. 403 130, the omission of stock of large value, which had been pledged to secure an indebtedness set out in the schedule, but with a state- ment that it was unsecured, was regarded in the absence of the strongest and clearest proof that it was unintentioual as furnish- ing evidence that the assignment was fraudulent. But the mere omission of property from the schedule, although prepared by the assignor, will not necessarily establish a conclusion of fraudulent intent. It may be shown by way of explanation that the omitted item is valueless or that it was omitted accidentally or uninten- tionally. Shultz V. Hoagland, 85 N. Y. 464 ; Ellis v. Myers, 28 State E. 120 ; Blam v. Pool, ] 3 State R. 571. So where it appeared that a creditor held a double security for his debt, the omission of the fact of the additional security from the inventory was not regarded as necessarily indicative of fraudulent intent. Cutter V. Hume, 43 State R. 242. But where the inventory and schedule are prepared by the assignee under the provisions of the section cited {ante, § 315), a different rule prevails. Thus in Denton v. Merrill, 50 JST. Y. Supm. Ct. (43 Hun), 224, 232, 8. c. 5 State R. 387, 393, where the schedule was prepared by the assignee, it was said that this schedule may have been corn- petent as evidence, but it was not necessarily a part of the assign- ment in such sense as to make the amount mentioned as the debt to a particular creditor the amount intended to be paid to that creditor under a preference in the assignment. " It is difiRcult," says Bradley, J., in the case last cited, " to see how the act of an assignee subsequent to the assignment, in causing to be made a schedule, ' in so far as he can,' can ordinarily be treated as char- acterizmg the intent of the assignor in making it ; at all events it cannot as matter of law be said that the assignee in such case has expressed in the schedule the purpose of the assignor when he executed the assignment and thus give invalidity to the lat- ter." " The making of the schedules, when made by the assignor, may so far be treated as within his contemplation when the assign- ment was executed as to reflect upon and characterize his pur- pose in making the assignment, and it is usually entitled to such effect." PhUli/ps v. Tucker, 14 State R. 120, 122, citing ■Talcott V. Hess, 38 Supm. Ct. (31 Hun), 282 ; Shults v. Hoag- land, 85 F.Y. 464, 468, 469. 404 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XIX. § 320. Form of inventory and schedules. — The statutes (ante, § 315) does not particularize the contents of the inventory and schedules except that it must contain : 1. The name, occupation, place of residence, and place of busi- ness of such debtor. 2. The name and place of residence of the assignee. 3. A full and true account of all the creditors of such debtor, stating the last-known place of residence of each, with the true cause and consideration therefor, and a full statement of any existing security for the payment of the same. 4. A full and true inventory of all such debtor's estate at the date of such assignment, both real and personal in law and in equity with the encumbrances existing thereon, and of all vouch- ers and securities relating thereto and the nominal as well as actual value of the same according to the best knowledge of such debtor. 5. An affidavit made by such debtor that the same is in all re- spects just and true. The form of inventory and schedules in common use will be found in the Appendix of Forms. A gen- eral statement of what the debts were contracted for is a suffi- cient statement of the cause and consideration to satisfy the statute. Eastern Nat. Bank v. Hidshizer, 2 State R. 93, and where obligations of the debtor are in the form of promissory notes, the objection that the consideration for which the notes given is not set out in the inventory will not be regarded as so defective as to show fraud on the assignment. Pratt v. Stevens, 94 N. Y. 387. The Rules of the Court of Common Pleas require that the schedule of liabilities and assets to be filed by the assignor or as- signee, shall fully and fairly state the nominal and actual value of the assets and the cause for the difference, and a separate affi- davit is required, which shall fully explain the cause of such difference. If required, the affidavits of disinterested experts as to such value must be furnished. See Rule 8, post, Addenda. When there is more than one sheet of paper necessary to contain the schedules, each page shall be signed by the person or persons verifying the same. The sheets of paper on which the schedules are written, shall be securely fastened before the filing thereof, and shall be indorsed with the full names of the assignor and as- § 321.] VERIFICATION OF INVENTOEY. 405 signee, and when filed by aa attorney shall also be indorsed with his name and business address. Rule 9, post. The name, resi- dence, occupation and place of business of the assignor, and name and place of residence of the assignee, may be incorporated in the affidavit or annexed to the schedule. Rule 11, fost. At the end of the schedule there must be a recapitulation, as fol- lows : Debts and liabilities, amount to $ Assets, nominally worth | Assets, actually worth % Rule 12, post. It is required that contingent liabilities should appear on a separate sheet of paper. Rule 13, fast. A statute passed in 1891 (Laws of 1891, c. 34) contains a direction to the effect that where an assignee for tlie benefit of creditors among other fiduciaries named is required to make an appraisal of property, he shall take the real estate at its full and true value, taking into consideration actual sales in the neighbor- hood during the previous year — property, stocks, bonds or securities customarily bought or sold in open markets in the city of New York or elsewhere — by ascertaining the range of prices and taking the average for a reasonable time. §321. Verification. — When the inventory and schedules are made by the debtor, they must be verified by him to the effect that they are in all respects just and true {ante, % 315). In the case of Produce BanTc v. Baldwin (49 How. Pr. 277), it was held that an inventory and schedule properly verified be- fore a competent officer was, under the act of 1860, as amended by the act of 1874, a pre-requisite to the vesting of a title in the assignee. In that case the verification was made before a notary public for Kings County, whose certificate had not been filed in New York. An appeal to the Court of Appeals was dismissed {Produce Bank v. Morton, 67 N. Y. 199), but that court ex- pressed the opinion that, assuming the verification to be bad, the assignment was valid notwithstanding the failure to make and verify the inventory and schedules, A verification to the inventory and schedule, by the assignor, " that the same was in all respects just and true to deponent's best knowledge, information and belief," was held to be a sub- 406 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XIX. stantial compliance with the statute. Prall v. Stevens, 94 N. T. 387. A statement of the " true cause and consideration therefor" does not- require, where the indebtedness consists of promissory notes, that the inventory should state what they are given for. A statement as to each note, of its date, time of payment, payee, to whom belonging, and the amount due thereon, is sufficient. Pratt V. Stevens, supra. If tliere are several debtors, each must join in the verification of the inventory. Cooh v. Kelly, 14 Abb. Pr. 466. When the inventory and schedules are prepared by the as- signee, he is required to verify it to the effect that the same is in all respects just and true to the best of his knowledge and be- lief. § 322. Delivery of inventory. — The statute provides that the inventory or schedule shall be delivered to the county judge of the county where the assignment is recorded, who shall file it with the clerk of that county. Laws of 187T, c. 466 ; Laws of 1878, c. 318. A delivery to the judge's clerk, at the office of the county judge, is a substantial compliance with the statute. So also a de- livery of the inventory to the county judge of an adjoining county, who is holding court in the county, is sufficient. Pratt v. Stevens, 94 N. T. 387. § 323. Preparation of schedules by assignee. — The statute provides {ante, § 315), that, in case the debtor omit, neglect or refuse to make and deliver the inventory or schedule within the twenty days required, the assignee named in the assignment shall, within thirty days after the date thereof, cause to be made and delivered to the county judge of the county where such assign- ment is recorded, such inventory and schedule, in so far as he can ; aud for that purpose the county judge may, upon the ap- plication of the assignee, compel by order the assignor or any other person to appear before him and disclose, upon oath, any knowledge or information he may possess necessary to the proper making of such inventory or schedule. He may also compel a production of books and papers. §§ 324, 325.] AMENDMENT OF INVENTORY. 407 Previous to this statute it was held that where an assignor re- fused to furnish a schedule referred to in the assignment, a court of equity would sustain a bill against him for a discovery and to obtain a delivery of the books and securities. Keyes v. Brush, 2 Paige, 311 ; see Von Rein v. Elkus, 15 Supm. Ct. (8 Hun), 516-518 ; Matter of Strauss, 1 Abb. N. C. 402. The tenth Rule of the Court of Common Pleas {post, Ad- denda), requires that, when the schedules are filed by the as- signee, there must be a full affidavit made by the assignee and some disinterested expert, showing the nature and value of the property assigned. § 324. Extension of time to file inventory and bond. — In cases where the assignor does not prepare and file the inventory and schedule, and that duty devolves upon the assignee, he may be unable to prepare them within thirty days after the date of the assignment, and since the schedule of property is essential to fix the penalty of the bond, it has been the custom of the Court of Common Pleas in a proper case to make an order extending the time within which the bond might be filed. § 325. Amendment of inventory or schedule. — By the sixth section of the act of 1877 (Laws of 1877, c. 466, as amended Laws of 1878, c. 318, §2), it is provided, that "the county judge shall have power, by order, to require or allow any inven- tory or schedule filed to be corrected or amended, and also to require and compel, from time to time, supplemental inventories or schedules to be made and filed within such time as he shall prescribe, and to enforce obedience to such orders by attach- ment." A mere omission in the inventory or schedules, if it occurs in- nocently, will not avoid the assignment. Mattison v. Dema- rest, 4 Eobt. 161, 172 ; see £utt v. Pech, 1 Daly, 83 ; see 8hult3 V. Roaglamd, 85 N. T. 464. See anU, § 238. The fourteenth Rule of the Court of Common Pleas provides that an application to amend the schedules shall be made by veri- fied petition, in which the amendments sought to be made shall be verified in the same manner as the original schedules were verified. 408 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XIX. § 326. Assignee's bond.— By the fifth section of the act of 1877 (Laws of 1877, c. 466, § 5), it is provided : " The assignee named in any sucli assignment shall, within thirty days after the date thereof, and before he shall have any power or authority to sell, dispose of, or convert to the purposes of tlie trust any of the assigned property, enter into a bond to the people of the State of N"ew York, in an amount to be or- dered and directed by the county judge of the county where such assignment is recorded, with sufficient sureties to be ap- proved of by such judge, and conditioned for the faithful dis- charge of the duties of such assignee and for the due account- ing for all moneys received by him, which bond shall be filed in the clerk's office of the county where such assignment is record- ed, but in case the debtor shall fail to present such inventory within the twenty days required, then the assignee, before the ten days thereafter shall have elapsed, may apply to said county judge by verified petition for leave to file a provisional bond, until such time as he may be able to present the schedule or in- ventory as hereinbefore provided." See Laws of 1860, c. 348, § 3 ; Laws of 1875, c. 56, § 1. The provision of the act of 1860, as amended by Laws of 1875, c. 56, was substantially the same, except that it required that the bond should be made within ten days after the delivery of the inventory and schedules, and it contained no provision in refer- ence to a provisional bond. By an amendment to § 3320, Code of Civ. Pro., it is provided that " any receiver, assignee, guardian, trustee, committee, ex- ecutor or administrator, required by law to give a bond as such, may include as part of his lawful expenses such reasonable sum, not exceeding one per cent per annum, upon the amount of such bond paid his sureties thereon, as such court or judge allows." § 327. Bond not essential to validity of assignment. — The act does not make the giving of the statutory security by the as- signee a condition precedent to the vesting of the estate in the trustee, nor does the failure to give the security within the time limited invalidate the transfer and restore the title of the assigned property to the assignors. Brennan v. Willson, 4 Abb. N. C. 279 ; s. c. 71 N. Y. 502 ; Thrasher v. Bentley, 1 Abb. N. C. §§ 328, 329.] assignee's authority befoke bond. 409 39 ; less fully, 59 N.-Y. 649 ; Syracuse, etc. R. R. Co. v. Col- lins, 1 Abb. JS". C. 47 ; s. c. 57 N. Y. 641 ; Worthy v. Ben- ham, 20 Supin. Ct. (13 Hun), 176 ; Von Hein v. Elkus, 15 Id. (8 Hun), 516 ; Hardmann v. Bowen, 39 N. Y. 196 ; Van Vleet v. Slauson, 45 Barb. 317 ; Evans v. Chapin, 20 How. Pr. 289 ; Barbour v. JEverson, 16 Abb. Pr. 366 ; Plume <& Atwood Mfg. Co. V. Strauss, 24 Supm. Ct. (17 Hun), 586 ; Sinclair v. Oak- ley, 6 W'kly Dig. 513 ; Bigler v. Nat. Bh. of Newburgh, 33 Supm. Ct. (26 Hun), 520 ; s. o. 14 W'kly Dig. 410. When the assignee executed a lease before he had given a bond, it was held that by subsequently recognizing the lease and acquiescing it and receiving rent under it, he was estopped from denying the validity of the lease. Smith v. Newell, 39 Supm. Ct. (32 Hun), 501. § 328. Failure to file the bond.— The failure to file the bond as required by the Act of 1877, could have no efEect on the validity of an assignment made before that act went into effect. Smith V. Newell, 39 Supm. Ct. (32 Hun), 501. In Ryan v. Webb, 46 Supm. Ct. (39 Hun), 435, it appeared that the assignee having failed to file a bond, issued an execution upon a judgment which he himself recovered under which he bought at sheriff's sale the assigned property. In a subsequent proceeding a new assignee was appointed, who demanded the property from the old assignee, who then claimed to hold it as purchaser at the sheriff's sale. It was held that, by the execu- tion and acceptance of the assignment, the title to the assigned property vested in the assignee as trustee, and that his sureties on an appeal bond were liable in an action brought on his failure to surrender the property. When the assignee fails to give a bond he will not be permitted on his own motion to resign his trust and be discharged. The proper course in such a case is for the court to remove the as- signee and hold him to account for the assigned estate. Matter of Parker, 10 Daly, 16. §329. Authority of assignee before giving bond. — The section of the act cited above {ante, § 326) requires that the as- signee shall give the bond required "before he shall have any 410 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XIX. power or authority to sell, dispose of, or convert to the purposes of the trust any of the assigned property. ' ' An attempt on the part of the assignee to execute a convey- ance of real property before giving the required bond is a nullity. Bren7ian v. Willson, i Abb. K C. 279, 289 ; s. c. 71 N. Y. 502 ; WoodwoHh v. Seymour, 29 Supm. Ct. (22 Hun), 245. But the assignee's title to the property is complete, and he may maintain an action for its conversion. Kilpatrich v. Dean, 15 Daly, 182. Until 'he has complied with the statute by giving the bond, his trust is but a dry trust, merely to take possession and hold the property until he becomes qualilied and has authority under the statute to dispose of it and convert it to the purposes of the trust. Brennan v. Wilison, supra. An inchoate right to the property in the meantime vests in the assignees for the purposes of the trust, although they are not empowered to dispose of it until the required bond is given. Von Hein v. Mkus, 15 Supm. Ct. (8 Hun), 516, 518. In Smith v. JVewell, 39 Supm. Ct. (32 Hun), 501 ; s. c. 19 W'kly Dig. 225, where the assignee executed a lease of a farm which was part of the assigned property, and accepted rent before he gave his bond, and after giving the bond continued to recog- nize the tenancy, this was taken to be a ratification of the lease, and was held good as against an execution creditor who at- tempted to levy on crops on the farm after the bond was given. § 330. The form and amount of the bond. — One object of the inventory is to aid in determining the amount of the bond to be given. Von Hein v. Elhus, 15 Supm. Ct. (8 Hun), 516, 518. The judge may, however, in his discretion, require that other proof should be presented to him to enable him to fix the proper penalty of the bond. The rules of the Court of Common Pleas (Rule 15) require that the bond shall be joint and several in form and must comply with the requirements of § 812 of the Code of Civil Procedure. That section reads as follows : " A bond or undertaking, executed by a surety or sureties, as prescribed in this act, must, where two or more persons execute it, be joint and several in form ; and, except as otherwise ex- pressly prescribed by law, it must be accompanied with the affi- § 330.] FORM AND AMOUNT OF BOND. 411 davit of each surety subjoined thereto, to the effect that he is a resideut of, and a householder or a freeholder within the State, and is worth the penalty of the bond, or twice the sum specified in the undertaking, over all the debts and liabilities which he owes or has incurred, and exclusive of property exempt by law from levy and sale under execution. A bond or undertaking given by a party, without a surety must be accompanied by his aDSdavit to the same effect. The bond, or undertaking, except as otherwise expressly prescribed by law, must be approved by the court before which the proceeding is taken, or a judge thereof, or the judge before whom the proceeding is taken. The approval must be indorsed upon the bond or undertak- ing." The rules of the court also provide that the court may, in its discretion, require any surety to appear and justify (Rule 16). They also provide that at least one of the sureties shall be a free- holder. If the penalty of the bond be twenty thousand dollars or over, it may be executed by two sureties, the amount of whose justification united is double the penalty of the bond. (Rule 17.) The general rules of the Court of Common Pleas provide tliat ' ' every bond required to be given by an assignee, under the act of April 13th, 1860, respecting voluntary assign- ments for the benefit of creditors, must specify the place of residence of each surety named therein at the time of presenting it for approval ; it must be accompanied by an affidavit showing the nominal value, and also the actual value, of the property assigned ; and no bond will be hereafter approved until these requirements are complied with. No bond will be approved until the schedule of assets and liabilities shall have been tiled, unless satisfactory proof by affidavit be produced, showing the reason of not filing the same." (Rule 20, General Rules.) The general rules of the court also provide : " No bond or undertaking will be allowed to be filed by the clerk of this court in his office, unless the same be legibly written, and all inter- lineations or erasures therein duly noted as having been made before the execution thereof . " (Rule 21, General Rules.) The direction as to the amount of the bond and the approval of the sureties are matters intrusted by the assignment act (§ 5) to the county judge, and in the city of New York to the judges of 412 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XIX. the Court of Common Pleas, but the authority may be exercised by a judge of the Supreme Court under the statute. § 331- Provisional bond. — The last clause of the section cited {aiite, § 326) is intended to meet a case where the assignor has failed to file the inventory and schedule, and the assignee is un- able to prepare the same, while the exigencies of the estate may require that he should be at once clothed with all the powers which he can exercise only upon giving security. In order to enable the assignee to give such security and to afterward pro- ceed to the preparation of a proper inventory and schedules, he may, upon petition presented to the county judge, be authorized to file a provisional bond imtil such time as he may be able to present the schedules or inventory provided for. The petition should set out the particulars of the assignment, the reason why the inventory and schedules have not been filed and cannot be filed, a detailed statement of all the assets covered by the assign- ment as fully as the assignee has been able to obtain information in reference to it, the incumbrances on the property and the amount of the liabilities. See Eule 1%, post, Addenda. For the purpose of obtaining the information necessary to pre- pare this petition, the assignee under the third section of the act {ante, § 36(5), may apply for and obtain an order from the county judge requiring the assignor and any other person to appear and disclose any knowledge or information they may possess. It has been customary for the judges of the Court of Common Pleas in New York City to authorize the filing of what is termed a provisional bond in some cases, even though the twenty days referred to in the section have not expired. This practice is justified by the fact that there is nothing in the general assign- ment act which requires that the inventory and schedule shall be filed before the bond is given. The judge may fix the penalty of the bond at any time and upon any evidence which seems to him satisfactory. The court may require further security to be given under the authority of the seventh section of the act, but until an order to that effect is made by the judge, the bond given, however the penalty may have been fixed, would appear to be a sufficient compliance witli the statute. (See Rule 18.) The practice, however, in Ifew York has been and is, when such § 832.] LIABILITY OP SURETIES. 418 a bond lias been given and the scliedules are afterward filed, to obtain an order fixing the penalty of the bond, and if such an amount is named as does not require the execution of a new bond, to then apply for an order making the provisional bond the permanent bond. In that event it is required that the sure- ties on the provisional bond should consent to the order. § 332. Liability of sureties. — The condition of the bond " is for the faithful discharge of the duties of the assignee and for the due accounting for all moneys received by him." The lia- bility on the bond is for the discharge of the assignee's duties under the assignment, and not for his responsibility for the as- signed property in ease the assignment is set aside. People v. Clmlmers, 8 Supm. Ct. (1 Hun), 683 ; afii'd, 60 K Y. 154. In the case cited, Mr. Justice Daniels sa^-s (p. 687) : " The remedy is clearly provided for, and confined to, those creditoi's claiming a benefit under the terms of the assignment itself. And that design is still further exhibited by the provisions made, concerning the action which may be brought upon the bond. (See post, § 332.) For it is only when the assignee shall omit, or refuse, to perform any decree or order made against him, for the payment of a debt out of the trust fund, by a judge or court having jurisdiction, that the bond can be ordered to be pros- ecuted. The default for whicli that can be done, is limited to the non-performance of the decree or order requiring payment to be made out of the trust fund, provided for, and contemplated by the assignment. And it clearly presupposes the continuance and execution of the trusts mentioned in it." But in the case of Adams v. Ilyams (19 Blatchf. 487), in the United States Circuit Court, it was held, that the sureties were responsible to an assignee in bankruptc)-, who had obtained a decree setting aside the assignment for the default of the State assignee in not paying over to tiie bankruptcy assignee the bal- ance of the trust funds found to be in his hands. The statute of limitations does not run against the claims of the assignor's creditors while the estate remains unsettled in the hands of the assignee as against the sureties on his bond. Peo- ple V. White, 35 Supm. Ct. (28 Hun), 289. The mere delay of creditors to call an assignee to account until 414 ADJIIXISTUATION OF ASSIGNED ESTATE, [ctl. XIX. after he lias become insolvent, will not relieve the sureties on his bond from liabllitv. J'eoplc v. Whit/', stqini. An order made on the accounting against the assignee is pre- snmptive evidence on which to charge the snreties, bnt subject til rebuttal and explanation. J'eoj)!/' v. IV/u'ti', xuj>f/t ; T/iom- Kiiii V. JIiu'Greffor, SI N. Y. 5!)2 ; Jir/'7(/r'j>r)/'t In.'':. Vo. v. inV- son, 34 X. Y. 275. The liability of sureties who have undertaken that tlie assignee " should faithfully execute and discharge the duties of such as- signee and duly account for all moneys received hy him as such assignee," extends not merely to his rendering an account, but also to the making of distribution under the decree. So that in a case where the decree provided for the payment by the assignee of certain suras to his coinisel the failure to make such ])ayment created a liability on the part of the assignee's sureties. Y Repealed Laws of 1877, c. 417. " 2 R. S. part 3, c. 5, title 1, art. 2. Repealed. ' Ante, Chapters II, III and IV. * Ante, Chapter V. ' Ante, Chapter VI. « Repealed. 27 418 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XX. debtor, in the same manner and with the like effect as such debtor might or could have done if no attachment had been issued, or trustees appointed, or an assignment had not been made ; and no set-off shall be allowed in any such suit, for any debt, unless it was owing to such creditor, by such debtor, before the first publication of the notice required in the first article,' or before the appointment of trustees under the second article," or before presenting the petition of the insolvent under the third,' fifth' and sixth ' articles, or before the publication of notice to creditors under the fourth ° article. But no suit in equity shall be brought by assignees of insolvents under the third, fourth and fifth articles, without the consent of the creditors having a major part of the debts which shall have been exhibited and allowed, unless the sum in controversy exceeds five hundred dollars : "2. To take into their hands, all the estate of such debtor, whether attached, or delivered to them, or afterwards discovered ; and all books, vouchers and securities relating to the same : "3. In the case of a non-resident, absconding or concealed debtor, to demand and receive of every sheriff who shall have at- tached any of the property of such debtor, or who shall have in his hands, any moneys arising from the sale of such property, all such property and moneys, on paying him his reasonable costs and charges, for attaching and keeping the same, to be allowed by the officer having jurisdiction : " 4. From time to time, to sell at public auction, all the estate, real and personal, vested in them, which shall come to their hands, after giving at least fourteen days' public notice of the time and place of sale, and also publishing the same for two weeks in a newspaper, printed in the county, where the sale shall be made, if there be one : "5. To allow such credit on the sale of real property by them, as they shall deem reasonable, not exceeding eighteen months, for not more than three-fourths of the purchase money ; which credit ' Repealed Laws of 1877, c. 417. « 2 R. S. part 2, c. 5, title 1, art. 2. Repealed. 2 AnU, Chapters II, III and IV. * Ante, Chapter V. ' Ante, Chapter VI. ' Repealed. § 338. J TBUSTEES UNDER EEVISED STATUTES, 419 shall be secured by a bond of the purchaser, and a mortgage on the property sold : " 6. On such sales, to execute the necessary conveyances and bills of sale : "7. To redeem all mortgages and conditional contracts and all pledges of personal property, and to satisfy any judgments, which may be an incumbrance on any property so sold by them ; or to sell such property subject to such mortgagesj contracts, pledges or judgments : "8. To settle all matters and accounts between such debtor, and his debtors, or creditors, and to examine any person touching such matters and accounts, on oath, to be administered by either of them : " 9. Under the order of the officer appointing them, to com- pound with any person indebted to such debtor, and thereupon to discharge all demands against such person." 2 K. S. 41, § 7 ; 4 E. S. 8th ed. 2526 ; 2 Edm. St. 43. Under the authority of the first paragraph of this section, the assignee may maintain an action against the sheriff for suffering goods attached by him to be lost through his negligence. Aoker v. Witherell, 4 Hill, 112. And he may maintain trover for the conversion of the personal property of the debtor before his ap- pointment. Gillet V. Fairohild, 4 Den. 80. The provisions of the statute in reference to the sale of the property are mandatory, and the court has no power to release the assignee from complying with the statute, or to require him to perform his duties in any other manner. HacMey v. Draper, 4 T. & C. 614 ; see Lihhy v. Bosehrans, 55 Barb. 202. In HacTc- ley V. Draper {supra), it was held that when a receiver of an in- solvent corporation, who has by law (2 E. S. 469) the same power and authority conferred upon trustees of the estates of in- solvent debtors, made application to, and obtained the order of the special term of the Supreme Court, authorizing him as re- ceiver, to sell certain of the trust property at public or private sale in his discretion, and upon such terms as he should deem best, it was held that a private sale consummated in pursuance of the order was not merely voidable, but absolutely void. But an order directing the receiver, under like circumstances, as to the manner in which he should proceed in giving notice of and 420 ADMINISTRATION OF ASSIGNED ESTATE. [CH. XX. making the sale, and which directs him to proceed in compliance witli the requirements of the statute, does not prejudice the sale. See Libby v. Hosekrans, supra. Trustees are entitled to redeem the lands of the debtor of whose estate they have charge ; but such redemption does not entitle them to a deed of the property sold, or authorize them to direct the execution of the deed to a third person. Its effect is the same as would be a redemption by the debtor himself, and not otherwise. Phyfe v. Riley, 15 Wend. 248. When the demand of a creditor is unliquidated, it is compe- tent for the trustees to assess and determine the damages of the creditor in the same maimer as a jury would do in an action of covenant. Matter of Negus, 7 Wend. 499. The decision of the trustees in determining the amount due to the several cred- itors will, however, be reviewed by the Supreme Court. If they err in the application of a principle of law, the court will correct the error ; but if they err on a question of fact or opinion, as in the assessment of unliquidated damages, their de- cision will be set aside if clearly against the weight of evidence, bnt not otherwise. Matter of Negus, supra. The court will not enjoin the proceeding of the trustee. If they do not comply with their duty, the creditor's remedy is by summary applica- tion to the Supreme Court. Huyler v. Westervelt, 1 Paige, 155. § 339- Rights of assignee under voluntary assignment,— The assignee under a general assignment takes the legal title to the property conveyed. His interest is that merely of a trustee ; the beneficial interest is in the creditors provided for. But neither the assignee nor the creditor part with any existing right in consideration of the assignment. They merely take what the conveyance gives. Hence, the assignee is not a purchaser for value (ante, § 228). He acquires no rights of property superior to those of his assignor. Fl/ynn v. Ledger, 55 Supm, Ct. (48 Hun), 465. The property is subject to the same liens and equities in his hands which existed against it before the execu- tion of the assignment. Leger v. Bonnaffe, 2 Barb. 475 ; Hag- gerty v. Palmer, 6 Johns. Ch. 437 ; In re Howe, 1 Paige, 125 ; Addison v. Burckmyer, 4 Sandf. Ch. 498 ; Corning v. White, 2 Paige, 567 ; Blydenhurgh v. Thayer, 3 Keyes, 293 ; s. c. 34 § 340.] TAKES SUBJECT TO LIENS. 421 How. Pr. 88 ; Bush v. Laih/rop, 22 N. T. 535 ; Schieffelin v. MawUns, 14 Abb. Pr. 112 ; Warren v. Fmn, 28 Barb. 333 ; yafe.] [Signature.] [ Venue.] -, being duly sworn, says, that he is the petitioner named in the annexed petition, and signed the same, and that the said petition is in all respects true in matter of fact. [Jurat.'] ' The affidavit must be taken on the day of the presentation of (he petition. § 2151, ante, % 13. 638 FOiJMs. No. 2. CONSENT OF CREDITORS. [See Code C. P. §§ 2152 to 3158, ante, §g 13 to 19.) I,' tlie undersigned, residing at , in the Sfate of a creditor of A. B., an insolvent debtor, having debts owing to me by the said A. B., in good faith, now dne \or, hereafter to become dne], which amount to dollars; Do hereby consent to the discharge of the said A. B. from liis debts, upon his complying with the provisions of article first of title first of chapter seventeenth of the Code of Civil Procedure. [AVhen the consenting creditor is secured, add :]" And wliere- as the undersigned has, in his own name [or, the, &c., is held by , in trust for him] a mortgage [or, judgment, or other secu- rity — describing it] which is a lien upon, or otherwise aiiects, real or personal property belonging to said insolvent \or, trans- ferred by him since the lien was created], and which is held ;is sectirity for the aforesaid debt. Now, therefore, I, the under- signed, do hereby relinquish the said mortgage [judgment or other security], so far as it affects the property of said insolvent, to the trustee to be appointed pursuant to the petition of said A. B. for the benefit of all his creditors. [When the consenting creditor is a non-resident," add :] That hereto annexed are the original accounts [or, sworn copies thereof, aiid the original specialties or other written securities] upon which the demands of the undersigned arose or depends. [When the consenting creditor is a purchaser' of the debt, add :] That the undersigned [or, if the consenting creditor be an executor, trustee, or receiver of the original creditor — the person from whom he derives title], purchased the said debt from [the original creditor], and that the undersigned [or, the person from whom he derives title] actually and m good faith paid therefor the sum of dollars.' [When the creditor desires to nominate a trustee," add :] 1 hereby nominate , of the county of , as trustee of the property and estate of said insolvent. [Date.] [Signature.] [AcTcnowledgmenI .] ' Several creditors may join in the consent. Code C. P. | 2152, ante, ^ 13. ' See Code 0. P. § 2ir)8, ante, 8 19. « See Code 0. P. § 3161, ante, % 22. " See Code C. P. § 2157, ante, § 18. '' If the debt was put in judgment after the assignment, costs may be added to the amount. See Code C. P. § 3157, ante, § 18. « See Code C. P. § 2176, ante, ^ 37. FOKMS. 639 No. 3. AFFIDAVIT OP CREDITOR. (See Code C. P. § 3160, ante, § 31.) [ Yejiue.] M. 'N., being duly sworn, says : I. That lie is [one of the firm of M. N.' & Co.— or, the ex- ecutor,' &(i.—or, administrator, trustee, receiver, of the estate of T. Z. — or, officer of a corporation'] the creditor so named in the accompanying consent to the discharge of A. B., of an insolvent debtor. II. That deponent resides at No. , street, in , in the State of [and that the said firm of corporation have their principal place of business at 'No. , street, in , in the State of ]. III. That said A. B. is justly indebted to deponent [or, to said firm or corporation — or, to deponent as such executor, ti-ustee, receiver, &c. — or, v?ili become indebted to deponent — or, to said firm, &c. on the day of , 18 ,] in ' the sum of dollars. IV. That the said, debt arose upon the following facts : [State the nature of the demand and whether it arose upon written security, or otherwise, with the general ground or consid- eration of the indebtedness.] [Where the consenting creditor is a purchaser' of the demand, add :] That deponent, or said Y. Z., purchased said debt of E. F., of , on the day of ,18 , and actually and in good faith, paid therefor the sum of dollars. V. That neither deponent [nor his partner — or, nor said corporation — or, nor said Y. Z.] nor any person to his [or, their] use has received from said A. B., or from any other person, payment of such demand, or any part thereof, in money or in any other way, or any gift or reward of any kind, upon an express or implied trust, confidence, or understanding, that he [or, they] should consent to the discharge of the said A. B. [Where the creditor is a non-resident, add :Y That the ac- counts [or, specialties — or, other written securities] attached to the consent of the discharge of A. B., signed by deponent, are the original accounts [or, sworn copies thereof — or, the original specialties — or, other written securities] upon wliich his demand arose or depends. ' See Code C. P. ^ 3155, ante, 8 16. ' See Code C. P. § 3153, ante, ^ 14. " See Code C. P. | 3154, ante, & 15. " See Code C. P. § 3157, ante, % 18. ' See Code C. P. § 3161, ante, % 33. 640 FORMS. ["Where the affidavit is made by an administrator, trustee, re- ceiver, or assignee, or an executor, briefly allege that, by an order duly made, he has been authorized to become a consenting cred- itor, and annex and refer to a certified copy (if the case is within § 2153) of the order.] [Where a consenting creditor is an executor or administrator, trustee, receiver, or assignee, he may state the necessary facts in his affidavit upon information and belief, setting forth therein the grounds of his belief ; but, in that case, the consent must also be accompanied with the affidavit of the insolvent, to the effect that all the matters of facts stated in the affidavit of the consenting creditor are true.] No. 4. SCHEDDLE OF CREDITORS. (See Code C. P. § 3162, ante, § 2.3.) A full and true account of all the creditors of , an insolvent debtor, with the place of residence of each ; the sum owing to each of them by the said insolvent ; the nature of each debt and demand, and whether arising on written security on ac- count or otherwise, with the true cause and consideration thereof, and the place where the same accrued, and the existing judgments, mortgages or collateral or other security for the payment of the same. Creditors. Residence. State and County. Sum Owinsr. Dolls. Cts, Nature of debtor demand, with tlie true cause aud o ns i d e ration tliereof, and wlie- tlier arising on written security, on account, or otlierwise. Accrued at Statement of any existing judgment mort- gage, or collat- eral or other security for its payment. No. 5. Inventory of Property Annexed to and Forming Fart of Scliednle. (See Code C. P. § 3162, ante, § 23.) A full and true inventory of all the property of , an insolvent debtor, in law or in equity, and of all tlie incumbrances FORMS. 641 existing thereon, and of all the books, vouchers, and securities relating thereto [and the value of such estate according to the best knowledge of J. No. 6. AFFIDAVIT OF PETITIONER. (See Code C. P. § 2163, ante, § 24.) [ Venue.] I, , do swear [or affirm, as the case may be], that the matters of fact stated in the schedule hereto annexed, are, in all respects, just and true ; that I have not, at any time or in any manner whatsoever, disposed of or made over any part of my property, not exempt by express provision of law from levy and sale by virtue of an execution, for the future benefit of myself or my family, or disposed of or made over any part of my property, in order to defraud any of my creditors ; that I have not, in any instance, created or acknowledged a debt for a greater sum than I honestly and truly owed ; and that I have not paid, secured to be paid, or in any way compounded with, any of my creditors, with a view fraudulently to obtain the prayer of my petition. [Signature.] [Jurat.] No. 7. OUUER TO SHOW CAUSE.' (See Code C. P. § 2164, ante, % 25.) At a Special Term, &c. In the Matter of the Application of , an Insolvent Debtor, for his Discharge from his Debts. On reading and filing the petition of , an insolvent debtor, verified on this day of ? 18 > the consents and affidavits of the creditors [name them], and the relinquish- ments of and , the affidavits of , verified the day of , 18 , and the schedules and affidavits ' The statute does not require that the inventory shall specify value. The Forms used under the Revised Statutes, as well as those in use under the Code, contain tiis clause. * This Form is adopted from Abbott's Forms. 41 642 FORMS. thereto annexed, verified before the above named , this day of ) 18 , and on motion of , attorney for said petitioner, Oedbeed, 1. That all the creditors of the said show cause before this court, at a [special] term thereof, to be held at the [court house] in the of , on the day of , 18 , at o'clock in the noon, why an as- signment of said insolvent's property should not be made, and he thereupon discharged from his debts as prescribed in article first of title first of chapter seventeenth of the Code of Civil Pro- cedure. 2. That a copy of this order be published in the newspaper printed at Albany, in which legal notices are required by law to be published, and in , a newspaper published in the county of , and in the , a newspaper published in the city of [New York], at least once in each of the ten [or, six] weeks immediately preceding the said day of 3. That the petitioner also cause to be served upon each cred- itor of said , residing within the United States, whose place of residence is known to him, a copy of this order, either person- ally at least twenty days before the said day of , or by depositing it at least forty days before that day in the post office, inclosed in a post-paid wrapper addressed to the cred- itor at his usual place of residence. [If the State is a creditor direct service on the Attorney- General.] No. 8. AFFI0.V71T AS TO RESIDENCE OF CaEDITORS.' (See Code C. P. § 2165, anU, § 36.) [ Venue.] A. B., being duly sworn, says, that he is the petitioner above named ; that the places of residence of the creditors of this de- ponent residing in the United States, whose places of residence are known to deponent, are as follows : JV^ames of Creditors. Places of Residence. [Jurat.'] [Signature.] ' This affidavit is usual but appears to be unnecessary, since the schedule and the affidavit accompanying it furnish evidence of the place of residence of each creditor if it is known. FORMS. 643 No. 9. AFFIDAYIT OF PUBLICATION OF ORDFR TO SHOW CAUSE. (See Code C. P. § 3165, ante, § 26.) [ Venue.] — , being duly sworn, says, that lie is, and during the whole time hereinafter mentioned was, the printer [or, foreman — or, principal clerk of the printer] of the , a newspaper published in the county of , and that a copy of an order to show cause, of which a printed copy is hereto annexed, was published once in each of the six [or, ten] weeks immediately preceding the day of ,18 [the day on which cause is to be shown], which said publication commenced on the day of , 18 , and terminated on the day of ,18 . [/Signature.'] [Jurat.] No. 10. AFFIDAVIT OF SERVICE OF ORDER TO SHOW CAUSE. (See Code C. P. §§ 3165, 3166, ante, §§ 36, 37.) [ Venue.] , being duly sworn, says, that he is upwards of twenty- one years of age, and resides at ; that on the day of , 18 , at ISTo. , street, in the , in the county of , State of New York, he served upon , a copy of the order to show cause hereto annexed, by delivering to and leaving with the said , personally, a true copy thereof. [If the service was made by depositing in the post office say :] That on the day of j 18 , he served upon the follow- ing named persons, creditors of tlie said A. B., to wit [here insert names and residences of creditors], a copy of the order to show cause hereto annexed, by depositing a true copy thereof in the United States post office in , inclosed in a post-paid wrapper and addressed to each of said creditors respectively, at the place of residence set after each of said names respectively. No. 11. SPECIFICATION OF OBJECTIONS AND DEltlAND FOR A JURY. (See Code C. P. §§ 3167, 3168, ante, §§ 38, 39.) [Title of proceedings.] To the County Court of the county of [or, Court of Common Pleas for the city and county of New York] : 644 i'OKMS. I, , one of the creditors of said A. B.,' do hereby ob- ject to the discharge of said A. B. as an insolvent debtor, and specify the following grounds of my objections to such discharge [specify the grounds of objection fully]. And I demand that the questions of fact arising thereon be tried by a jury. iDate.} [Signature.] No. 12. ORDER FOR TRIAL OF ISSUES BY A JURY. (See Code C. P. § 3168, ante, % 29.) At a Special Term, &c. [Title.] The above entitled matter coming on to be heard before this court on the order to show cause herein, made on the day of ,18 , and the papers therein recited, and , one of the creditors of the said A. B. an insolvent debtor, having filed specifications of his objection to the discharge of the said A. B. as an insolvent debtor, and having demanded that the questions of fact arising thereon be tried by a jury. It is ordered, that the questions of fact arising upon the said order to sliovs^ cause, and the papers recited therein, and that the said specifications of objections to the discharge of the said A. B., be tried by a jury at a term of this court, to be held at on the day of , 18 , or as soon thereafter as may be in the due course of business. No. 13. ORDER FOR ASSIGNMENT. (See Code C. P. § 3174, ante, § 35.) At a Special Term, &c. [Title.] It appearing to the court, from the verdict of the jury ren- dered herein on the day of > 18 , [or, from the proofs of the respective parties to this proceeding,] that the petitioner is justly and truly indebted to the consenting creditors in sums which amount, in the aggregate, to twp-thirds of all the debts which the said petitioner owed at the time of presenting his petition to creditors residing within the United States : that said petitioner has honestly and fairly given a true ' If the creditor is not named in the schedule he must also file an affidavit as required by Code C. P. § 3169, ante, % bO. FORMS. 645 accoTint of his property, and has in all things conformed to the matters required of him by article first of title first of chapter seventeenth of the Code of Civil Procedure ; it is now, on [the verdict of the jury rendered herein on the day of , 18 ], and on all the papers and. proceedings herein, and on proof of due publication and service of the order requiring creditors to show cause granted herein on the day of , 18 , and on motion ol , of counsel for the petitioner, Ordered, that the petitioner execute to said , olE No. , street, in . coimty of , as trustee, who is hereby designated a trustee for that purpose, an assign- ment of all his (said petitioner's) property at law or in equity in possession, reversion, or remainder, excepting only so much thereof as is exempt by law from levy and sale by virtue of an execution. No. 14. ASSIGNMENT. (See Code C. P. § 3175, ante, § 36.) Know all men iy these presents^ That I, , of , an insolvent debtor, did present to the [county court of the county of .], a petition to be discharged from my debts, pursuant to the provisions of article first of title first of chap- ter seventeenth of the Code of Civil Procedure, to which said petition were annexed the consents of so many of my creditors residing in the United States as have debts owing to them by me, which amount to not less than two -thirds of all the debts owing by me, to creditors residing within the United States, whereupon the said [county court of the county of ] ordered all of my creditors to show cause, if any they had, before it at a specified time and place, why an assignment of my property should not be made, and I thereupon discharged from my debts as prescribed in said article, which order to show cause was duly published and served upon each of my creditors residing within the United States ; and no good cause appearing to the contrary, and it satis- factorily appearing to said court that I was justly and truly in- debted to the consenting creditors as aforesaid, that I had honestly and fairly given a true account of my property, and had in all things conformed to the matters required of me by said article, and said court having thereupon directed me to execute to , Esq., as trustee, an assignment of all my property not exempt from execution : i ■ -. J^ow, therefore, know ye, tliat, in conformity to the said 646 FORMS. direction, I have granted, released, assigned, and set over and by these presents do gi-ant, release, assign, and set over nnto of , the trustee designated therein, all my property at law or in equity, in possession, reversion, or remainder, ex- cepting only so much thereof as is exempt by law from levy and sale by virtue of an execution, and all the books, vouchers, and papers relating thereto, to hold the same unto the said trustee to and for the use and benefit of all my creditors. In "Witness Whekeof, I have hereunto set my hand and seal, this day of , 18 . {Signatures of witnesses.'] [AcJcnowledgmentJ] [The assignment must be recorded in the clerk's ofBce of the county, and if it passes real estate, also in the proper office for recording deeds.] No. 15. CERTIFICATE OF TRUSTEE. (See Code C. P. § 3178, ante, § 39.) I, , do hereby certify that , an insolvent debtor, has this day, by an instrument in writing, duly acknowledged [or, proved] and certified, granted, conveyed, assigned, and de- livered to me for the benefit of all his creditors, all his property ut law or in equity, in possession, reversion, or remainder, ex- cepting only so much thereof as is exempt by law from levy and sale by -virtue of an execution, and all his books, vouchers, and papers relating thereto, and has delivered so much thereof as is capable of delivery. In Witness "Wheeeof, &c. [AcJcnowledgment.] No. 16. CERTIFICATE OF COUNTY CLERK. (See Code C. P. § 3178, ante, § 39.) I, , clerk of the county of , do hereby certify that the assignment above mentioned was duly recorded in the clerk's office of said county on the day of , 18 . In "Witness Thereof, I have hereunto subscribed my name and affixed my official seal this day of , 18 . [seal.] {Signature of\ Clerk. FOEMS. 647 No. 17. DISCHARGE. (See Code C. P. § 2180, ante, § 43.) To all whom these presents shall come or may concern^ greeting : Whereas, , an insolvent debtor residing at , on the day of , 18 , presented to this court his petition, duly verified on that day, to be discharged from his debts pur- suant to the provisions of article first of title first of chapter seventeenth of the Code of Civil Procedure, to which petition was annexed the schedule i-equired by law, duly verified on said day, and the proper consents of so many of his creditors residing in the United States as have debts owing to them by said insolvent which amount to not less than two-thirds of all the debts owing by said insolvent to creditors residing within the United States, which said consents were accompanied by the affidavits [and declarations, accounts, and written securities] of said creditors required by law : Whereupon the court duly ordered all the creditors of said insolvent to show cause before it, at a specified time and place, why an assignment should not be made and said insolvent there- upon discharged from his debts as prescribed in said article, and which order to show cause was, by direction of this court, duly published and served upon each of said insolvent creditors as prescribed by law, and due proof of such publication and service having been made ; and whereas, upon the hearing on said petition [and by the verdict of the jury] it appeared satisfactorily to this court that said insolvent was justly and truly indebted to the consenting creditors as aforesaid, and had honestly and fairly given a true account of his property, and had in all things con- formed to the matters required of him by said article [and no good cause appearing to the contrary], an order was made by this court directing an assignment to be made by said insolvent, for the benefit of all his creditors, of all his property at law or in equity, in possession, reversion or remainder, except such as is exempt from execution to , the trustee designated ; and whereas, said insolvent has, on the day of ; 18 , made such an assignment, and produced to this court, a certificate of said trustee, duly acknowledged [w, proved] and certified, that said insolvent has assigned to him, for the benefit of all his cred- itors, all his property so directed to be assigned, and all the books, vouchers and papers relating thereto, and has delivered so much thereof as is capable of delivery ; and also a certificate of the county clerk of said county that such assignment has been duly recorded in this office : Now, therefore, know ye, that said insolvent, , is hereby POEMS. discharged from all his debts, and from imprisonment therefor, pursuant to the provisions of said article, and subject to the ex- ception therein prescribed. FORMS IN FEOCEEDINGS FOR EXEMPTION FROM ARREST OR DISCHARGE FROM IMPRISONMENT OF AN INSOLVENT DEBTOR. (Ante, Chapter V.) No. 18. Petition of Insolreat to Obtain Exemption from Arrest or Discharge from Imprisonment. (See Code C. P. § 3189, ante, § 71.) To the County Court of the County of ' [or, Court of Common Pleas for the City and County of New York]. The petition of A. B. respectfully shows to this Court : I. That your petitioner resides at No. street, in , in the county of [and if he is imprisoned state the county in which he is imprisoned and the cause of the imprisonment. II. That your petitioner has become and is insolvent and is unable to pay all his debts in full. III. That your petitioner is willing to assign his property for the benefit of all Ids creditors, and in all other respects to comply with the provisions of article second of title one of chapter seven- teentli of the Code of Civil Procedure, for the purpose of being exempted from arrest and imprisonment as prescribed therein. Wherefore your petitioner prays, that upon his so doing he may be exempted from arrest by reason of any debt ai-ising upon a contract previously made [and if* he is imprisoned, that he may be discharged from his imprisonment]. {Bate.l [ Venue.'] A. B., being duly sworn, says, that he is the petitioner above named, and signed the above petition, and that the same is in all respects true in matter of fact. ISianature.l [Jurat.'] ^ ' The application must be made to the County Court of the county in wliich the insolvent resides or is imprisoned. Code C. P. § 2188, ante, 8 70. ' The affidavit must be talten on the day of the presentation of tlie petition. Code C. P. g 3189, ante, % 71. FORMS. 649 No. 19. SCHEDULE AND INYEJiTORY. (See Code C. P. § 3190, ante, § 73.) The Form is the same as that under the Two-Thirds Act. See Form JSTo. 4. No. 20. PETITIONEE'S AFFIDAVIT. (See Code C. P. § 3191, ante, § 73.) [ Venue.] I, , do swear [or " affirm" as the case may be], that the matters of fact stated in the schedule hereto annexed, are, in all respects, just and true ; that I have not, at any time or in any manner whatsoever, disposed of or made over any part of my property, not exempt by express provision of law from levy and sale by virtue of an execution, for the future benefit of myself or my family, or disposed of or made over any part of my property in order to defraud any of my creditors ; and tbat I have not paid, secured to be paid, or in any way compounded with, any of my creditors, with a view that they or any of them should abstain from opposing my discharge. [^i^ignature.] [Jurat.'] No. 21. ORDER TO SHOW CAUSE. (See Code C. P. § 3193, ante, § 74.) In the Matter of the Application of A. B., An Insolvent Debtor, for Exemption from Arrest and Discharge from Imprisonment. On reading and filing the petition of A. B., an insolvent debtor, verified on the day of , 18_ , and the schedule and inventory thereto annexed ; and the affidavit of A. B., said insolvent debtor, verified on tbe day of , 18 ; and 650 FORMS. upon application of , counsel for said petitioner; It is ordered, that all the creditors of said A. B., the petitioner afore- said, show cause at a special term of this court, to be held at the County Court House in , on the day of , at o'clock, M., why the prayer of the petitioner should not be granted, and why the said A. B. should not be exempt from arrest from any debt arising upon contract previously made, and why he should not be discharged from imprisonment. No. 22. ORDER FOR ASSIGNMENT. (See Code C. P. § 3194, ante, § 76.) At a Special Term, &c. [THle.] It appearing to the court, from the verdict of the jury ren- dered herein on the day of ,18 , [o?-, from the proofs of the respective parties to this proceeding,] that the petitioner, , is unable to pay his debts, and that the schedule annexed to his petition is true, and that he has not been guilty of any fraud or concealment in violation of the provisions of article second of title one of chapter seventeenth of the Code of Civil Procedure, and that he has in all things conformed to tjie mat- ters required of him by said article : Now, on the verdict of the jury herein, and on all the papei's and proceedings herein, and on proof of due publication and seiwice of the order requiring the creditors of said petitioner to show cause granted herein, on the day of , 18 , and on motion of , counsel for said petitioner, It is ordered, that the petitioner execute to , of , as trustee, who is hereby designated as trustee for that purpose, an assignment of all his property at law or in equity, in possession, reversion, or remainder, excepting only so much there- of as is exempt by law from levy and sale by virtue of an execu- tion. No. 23. ASSIGNMENT. (See Code C. P. §§ 3194, 3195, ante, §§ 76, 77.) Know all men by these presents, that I, A. B., an insolvent debtor, did present to the court a petition to be exempted from arrest [or, discharged from imprisonment], pursuant to the provisions of article second of title one of chapter seventeenth of FORMS. 651 the Code of Civil Procedure, witli the schedules and inventory and affidavit required by said statute, whereupon the said court made an order requiring all of my creditors to show cause, if any they had, before it, at a specified time and place, why an assignment of my property should not be made and I be ex- empted from arrest and discharged from imprisonment, as pro- vided by said article, which said order to show cause was duly published and served upon each of my creditors residing in the United States ; and no good cause appearing to the contrary, and it satisfactorily appearing to said court that I was unable to pay my debts and that the schedule annexed to my petition was true, and that I had not been guilty of any fraud or concealment in violation of the provisions of the said article, and that I had in all things conformed to the matters required of me by said article, and said court having thereupon directed me to execute to , as trustee, an assignment of all my property not exempt by law from levy and sale by virtue of an execution : Now, therefore [proceed as in Form No. 14]. .No. 24. DISCHARGE. (See Code O. P. § 3195, anU, % 77.) \Title of proceeding. 1 To all to whom these presents shall come or may concern. Greeting. Whereas, , an insolvent (and imprisoned) debtor, on the day of ,18 , presented to this court his petition, duly verified on that day, praying that his estate might be assigned for the benefit of all his creditors, and that he might thereafter be exempted from arrest by reason of any debt arising upon a contract previously made [and also that he might be dis- charged from his imprisonment], pursuant to the provisions of article second title first of chapter seventeenth of the Code of Civil Procedure, to which petition was annexed the schedule re- quired by law, duly verified on said day, and this court having thereupon made an order requiring all the creditors of said petitioner to show cause before it, at a time and place specified, why the prayer of the said petitioner should not be granted, which order was by the direction of this court duly published and served upon each of said insolvent's creditors, and proof thereof duly made ; Whereas, upon hearing on said petition (and by the verdict of the jury), it appeared satisfactorily to this court that the said petitioner was unable to pay his debts, that the schedule annexed to his petition was true, that he had not been guilty of any fraud 652 FORMS. or concealment in violation of the provisions of the aforesaid article, and that he had in all things conformed to the matters required of him thereby, and no good cause appearing to the contrary, an order was made by this court directing an assign- ment to be made by said insolvent for the benefit of all his cred- itors, of all his property at law or in equity, in possession, rever- sion or remainder, except such as is exempt from execution to , of , the trustee designated ; and, Whereas, said insolvent has, on the day of > 18 , made such an assignment and produced to this court a certificate of said trustee, duly acknowledged [or, proved] and certified that said insolvent has assigned to him, for the benefit of all his creditors, all his property so directed to be assigned, and all the books, vouchers and papers relating thereto, and has delivered so much thereof as is capable of delivery, and also a certificate of the count}' clerk of said county that such an assignment has been duly recorded in his oifice : Now, therefore, know ye, that , the said insolvent [and imprisoned] debtor, is hereby granted a discharge from imprison- ment, pursuant to the provisions of the aforesaid article, and it is hereby declared that the said petitioner is forever hereafter ex- empted from arrest or imprisonment oy reason of any debt due at the time of making said assignment or contracted before that time, though payable afterwards, or by reason of any liability incurred by him by making or indorsing a promissory note, or by accepting, drawing, or indorsing a bill of exchange before the execution of such assignment, or in consequence of the payment by any party to such a note or bill of the whole or any part of the money secured thereby, whether the payment be made before or after the execution of such assignment, pursuant to the provision of said article and subject to the exceptions therein prescribed. POKMS. 653 FOEMS IN PEOCEEDINGSUNDEETHE'TOUETEEN DATS ACT." (See Chapter VI.) No. 25. PETITION FOR DISCHARGE FROM IMPRISONMENT ON EXECUTION. (See Code C. P. §;2203, ante, % 86.) To the [court from wliich the execution issued, or the County Court, or, in the city of New York, the Court of Common Pleas].' The petition of A. B. respectfully shows : I. That your petitioner resides at No. , street, in , in the county of , and is a prisoner confined in [or, within the jail liberties of] the jail of the county of , on an execution in a civil action [here set forth a copy of the substance of the execution, or, if there are two or more execu- tions, of each of them]. That the sum of dollars is now due and unpaid on said execution [or, executions ; and if the aggregate exceeds $500 add, and your petitioner has been imprisoned on said executions for more than three months]. That hereto annexed is a schedule containing a just and true account of all his property, and of all charges affecting the same, as the property and charges existed at the time when he was first imprisoned, and also as they exist at the present time, together with a just and true account of all deeds, seciirities, books, vouchers and papers relating to the property, and to the charges thereupon. Wheeefoee, your petitioner prays the order of this court directing the sheriff of said county to bring your petitioner be- fore it on a day designated for that purpose, and that your peti- tioner may be discharged from imprisonment upon a comphance with the provisions of article third of title one of chapter seven- teenth of the Code of Civil Procedure. [Signature.l ' See Code C. P. § 2301, ante, § 84. 654 FORMS. No. 26. SCHEDULE REFERRED TO IX THE FOREGOING PETITION. (See Code C. P. § 3203, anU, § 86.) A just and true account of all the property of A, B., an im- prisoned debtor, and of all charges affecting the same, as the property and charges existed at tne time when he was first im- prisoned, and also as they exist at the time when the foregoing petition was prepared, together with a just and true account of all deeds, securities, books, vouchers and papers relating to the property, and to the charges thereupon. No. 27. AFFIDAVIT TO BE ANNEXED TO THE PETITION AND SCHEDULE. (See Code C. P. § 3304, ante, § 87.) [ Venue.] I, , do swear [or " affirm," as the case may be], that tlie matters of fact stated in the petition and schedule hereto annexed, are in all respects just and true ; and that I have not, at any time or in any manner whatsoever, disposed of or made over any part of my property, not exempt by express provision of law from levy and sale by virtue of an execution, for the future benefit of myself or my family, or disposed of or made over any part of my property, with intent to injure or defraud any of my creditors. [Jurat.'] [Signature.'] No. 28. NOTICE TO CREDITORS. (See Code C. P. § 3205, ante, % 88.) [Title.] To [the judgment creditor]. Please to take notice, that I shall present the petition and schedules, of which copies are hereto annexed, to the Court, at a [special] term thereof to be held at the County Court House in , in the county of , on the day of , 18 , at o'clock in the noon, and I shall there and then apply to said court that the prayer of said petition be granted. [Date.] [Signature.] FORMS. 655 No. 29. ORDER TO BRING PRISONER BEFORE THE COURT. (See Code C. P. § 2^08, ante, § 91.) At a Special Term, &c. [Title.] A. B., having presented his petition, with the schedule re- quired by law, to this court, praying for an order directing the sheriff of the county of to bring him, the said A. B., be- fore this court on a day assigned for that purpose, and that the said A. B. be discharged from imprisonment upon an execution issued out of this court [or, the ], in an action wherein is plaintiff, and the said A. B. is defendant, and due proof having been made of the service of the said petition and schedules annexed thereto, with due notice of the time and place of presen- tation of the same : It is ordeeed, that the sheriff of the county of bring the said A. B. before this court, at a [special] term thereof to be held at the County Court House in , on the day of ,18 , at o'clock in the noon. No. 30. RDER DIRECTINe ASSIOSMEST. (See Code C. P. § 3208, ante, § 91.) At a Special Term, &c. [Title.] A. B., having presented his petition, with the schedule re- quired by law, to this court, praying for an order directing the sheriff of the county of to bring the said A. B. before this court on a day assigned for that purpose, and that the said A. B. be discharged from his imprisonment upon an execution issued out of this court [or, the ], in an action wherein is plaintiff and said A. B. is defendant, and having also made affidavit as required by law ; and the said order having been duly issued, and the said A. B. having been brought before this court in pursuance thereof, and the court having heard the allegations and proofs of the parties, and being satisfied that the said petition and schedule are correct, and that the petitioner's proceedings are just and fair : It is ordered, that the said A. B. execute to , of , as trustee, who is hereby designated as trustee for that purpose, an assignment of all his property not expressly exempt by law 656 FORMS. from levy and sale by virtue of an execution, or of so much there- of as is sufiBcient to satisfy tbe execution [or, executions] by virtue of wliicli he is imprisoned. No. 31. DISCHARGE. (See Code C. P. § 2212, ante, § 96.) At a Special Term, &c. [I'itle.] It appearing to the satisfaction of the court that , the petitioner herein, is imprisoned in the county of New York, by virtue of execution in civil cause in his petition and hereinafter specified ; [" and that there is due upon tlie said ex- ecution(s) a sum not exceeding five hundred dollars," or, " and that before petitioning for his discharge the said debtor had been so imprisoned under said execution(s) for three months ;"] and that the said debtor had petitioned this court for his discharge from such imprisonment, under the provisions of article three title one of chapter seventeenth of the Code of Civil Procedure, on his compliance with the provisions of said article ; and that due previous notice of the time and place at which such petition was presented, together with a copy of such petition and the schedule of his property, in said statute directed, were duly per- sonally served by such debtor on [" the attorney(s) for," or, " the personal representative(8) of,"] the creditors, at whose suit he is imprisoned as aforesaid ; and that such petition sets forth the cause of the imprisonment of the applicant, and has annexed to it a just and true schedule of all his property, and of all charges affecting the same, both as such property and charges existed at the time when he was first imprisoned, and as they existed at the time of preparing such petition, together with a just and true account of all deeds, securities, books and vouchers and papers relating to the said property, and the charges thereon ; and that at the time of presenting such petition there was annexed thereto, and sworn to by the said applicant, the affidavit required by sec- tion 2204 of the said article, to the effect that the matters of fact stated in the petition and schedule of his property are in all re- spects just and true •, and that he has not at any time or in any manner whatsoever disposed of or made over any part of his property [not exempt by express provision of law from levy and sale by virtue of an execution] for the future benefit of himself or his family, or with an intent to injure or defraud any of his creditors ; and that the said affidavit is true ; and that upon the presenting of such petition and due proof being made of the i'ORMS. 657 service of a copy thereof and of the schedule thereto annexed, with the notice in said statute required, the court did duly order the applicant to be brought before it on a day assigned ; and that the said applicant was accordingly brought before the court on that day ; and that on such day, and such other days as the court did duly appoint, the court proceeded in a summary way to hear and determine the allegations and proofs of the parties ; and that the court, being satisfied that the petition and schedule of the applicant were correct, and that his proceedings were just and fair, did. order an assignment to be made of all his property [ex- cept the articles which were by law exempt from execution] ; and that tlie court did appoint an assignee, and that the assignment was dwly made to the person so appointed ; and that said assign- ment was also recorded by the clerk of the county of New York [in which county said assignment was executed] upon its having been acknowledged and proved in the same manner as deeds of real estate ; and such application having [" furnished satisfactory evidence of the actual delivery to the assignee so appointed of all the property so directed to be assigned, or, as the case may be, " given security for the future delivery to the assignee so appointed of all the property so directed to be assigned, which the court has approved,"] and the said petitioner having in all things complied with the provisions of the said article, and it further appearing that the said debtor is not barred from obtaining his discharge under the said execution : Now, after hearing , on behalf of the said petitioner, and , on behalf of said judgment-creditors ; and on motion of , Esq., attorney for said petitioner, it is, Okdeked, that the applicant be discharged from his imprisonment, by virtue of the said execution, issued in the said civil cause, specified in said petition, to wit, the execution issued out of the , wherein the said , judgment- debtor, and , judgment-creditor. 42 658 FORMS. FOEMS OF GENERAL ASSIGNMENTS, AND PRO- CEEDINGS THEREUNDER. No. 32. Assi^nient by IndiTidnnl (withunt Preferences, except Wages). This indenture, made this day of , in the year one thousand eight hundred and , between , residing at No. in the of in the State of , now carrying on the business of , at No. in the of , in the State of , part of the first part, and part of the second part, Witnesseth, That whereas the part of the first part indebted to divers persons in sundry sums of money, which imable to pay in full, and desirous of providing for the payment of the same, so far as is in power, by an assignment of all property for that purpose : Now, therefore, the said part of the first part, in consid- eration of the premises, and of the sum of one dollar to paid by the part of the second part, upon the ensealing and delivery of these presents, the receipt whereof is hereby ac- knowledged, has granted, bargained, sold, assigned, transferred and set over, and by these presents do grant, bargain, sell, assign, transfer and set over, unto the part of the second part successors and assigns, all and singular the lands, tenements, hereditaments, appurtenances, goods, chattels, stock, promissory notes, claims, demands, property and effects of every description belonging to the part of the first part, wherever the same may be, except such property as is exempt by law from levy and sale under an execution. To have and to hold the same, and every part thereof, unto the said part of the second part, successors and assigns : In trust, nevertheless, to take possession of the saine, and to sell the same with all reasonable dispatch, and to convert the same into money, and also to collect all such debts and demands hereby assigned as may be collectable, and with and out of the proceeds of such sales and collections : (1 ) First to pay and discharge all the just and reasonable expenses, costs and charges of execut- ing this assignment, and of carrying into effect the trust hereby created, together with the lawful commission of the part of the second part for services in executing said trust; (2) then, before the payment of any other debt of the part of the first part, to pay the wages or salaries actually owing to the em- ployees of the part of the first part at the time of the execution of this assignment, in full ; and should the assets of the assignor FORMS. 659 not be sufficient to pay in full all these claims, said assets shall be applied to the payment of the same pro rata to the amount of each of such claims ; (3) then to pay and discharge in full, if the residue of said proceeds is sufficient for that purpose, all the debts and liabilities now due or to grow due from the said part of the first part, with all interest moneys due or to grow due thereon ; and if the residue of said proceeds shall not be sufficient to pay the said debts and liabilities and interest moneys in full, then to apply the said residue of said proceeds to the payment of said debts and liabilities ratably and in proportion. And if, after the payment of all the said debts and liabilities in full, there shall be any remainder or residue of said property or proceeds, to repay and return the same to the said part of the first part, executors, administrators or assigns. (4) And, in furtherance of the premises, the said part of the first part do hereby make, constitute and appoint the said part of the second part true and lawful attorney irrevocable, with full power and authority to do all acts and things which may be necessary in the premises to the full execution of the trust hereby created, and to ask, demand, recover and receive of and from all and every person or persons, all property, debts and de- mands due, owing and belonging to the said part of the first part, and to give acquittances and discharges for the same ; to sue, prosecute, defend and implead for the same ; and execute, acknowledge and deliver all necessary deeds, instruments and conveyances. And the said part of the first part hereby authorize the said part of the second part to sign the name of the said part of the first part to any check, draft, promissory note or other instrument in writing, which is payable to the order of the said part of the first part, or to sign the name of the part of the first part to any instrument in writing, whenever it shall be necessary so to do, to carry into effect the object, design and purpose of this trust. The said part of the second part do hereby accept the trust created and reposed in by this instrument, and cove- nant, and agree to, and with the said part of the first part that will faithfully and without delay execute the said trust, according to the best of skill, knowledge and ability. In witness whereof, the parties hereto have hereunto set their hands and seals the day and year first above written. State of I County of f ' On the day of , in the year one thousand eight hundred and , before me personally canie to _me known, and known to me to be the individuals described in, and who executed the foregoing instrument, and severally acknowledged that they executed the same. 660 FORMS. No. 33. Copartnership Assi^ment. Assignment by Copartners as a Firm and Individnally (without Preference). This indenture, made the day of , in the year of our Lord one thousand eight hundred and , between , residing at No. Street, in the city of , and , residing at No. Street, in the city of , who have hitherto composed the partnership of , hitherto doing business at , as (stating kind of business) parties of the first part, and , of , party of the second part : "Witnesseth, that whereas the said parties of the first part are justly indebted to sundry persons in divers and sundry sums of money, and being unable to pay the same in full, are desirous of making an equitable distribution of their property and effects among their creditors : Now, therefore, First, The parties of the first part, in consideration of the premises, and the sum of one dollar to them in hand respec- tively paid by the party of the second part, the receipt whereof is hereby acknowledged, have granted, bargained, sold, assigned, delivered and conveyed, and by these presents do grant, bargain, sell, assign, deliver over and convey unto the party of the second part, his successors and assigns, all and singular the estate and property, real and personal, of every kind and nature, and wher- soever the same may be, of the said parties of the first part, which is held or owned by them as such copartnership firm as afore- said. To have and to hold the same and every part and parcel thereof, with the appurtenances, to said party of the second part, his successors and assigns. In trust, nevertheless, for the follow- ing uses and purposes ; Second. The said party of the second part shall forthwith take possession of all and singular the estate, property and effects hereby above assigned, transferred and conveyed, and set over, or intended so to be, and shall, with all reasonable diligence, sell and dispose of the same, and convert the same into money ; and shall collect any and all bills, promissory notes, bonds, accounts, choses in action, claims, demands, and money due or owing the said parties of the first part as such copartnership, so far as the same shall prove collectible. Third. Out of the proceeds of such sales, collections, estate and property, the said party of the secoiid part is authorized to pay and retain all reasonable costs, charges, and expenses of mak- ing, executing, and carrying into effect this assignment in this behalf, including a lawful commission to the party of the second FORMS. 661 part for his services in executing and carrying out the trust created in this belialf in this assignment. Fourth. The party of the second part is directed out of the residue of the said proceeds of such sales, collections, estate, and property, to pay before the payment of any other debts of the assignors any and all wages and salaries actually owing to the employees of the said parties of the first part at the time of the execution of these presents, and should the assets of the parties of the first part not be sufiicient to pay in full all the said claims, then to apply the same to the payment of the said claims ratably and in proportion to the amount of each such claim, and after the payment of the same in full.* Fifth. The said party of the second part is directed to pay out ojf the residue of the said proceeds of such sales, collections, es- tate and property, if there should be sufiicient therefor, to each and every of the creditors of the said parties of the first part, as such partnership or firm, the full sum that may be justly due and owing to them respectively from such partnership or firm, with-, out any priority or preference whatsoever, except as hereinbe- fore provided ; and if the residue of the proceeds of such sales and collections, estate and property, shall not be sufficient to pay and satisfy the debts of each and all of the creditors of the said partnership or firm in full, then the said party of the second part is directed, out of the said residue of the proceeds, to pay the said creditors ra.tably and in proportion to the amount due and owing to each of them respectively. Sixth. With and out of the residue and remainder of the said proceeds, if any shall remain after paying all the copartnership debts, the party of the second part is directed to pay and dis- charge all the private and individual debts of the parties of the first part, or either of them, whether due or to grow due, pro- vided the respective amounts of the individual debts of each of said parties does not exceed his portion of the surplus that may remain after paying all the partnership debts ; and if it should, then his interest in said surplus is to be divided pro rata among his individual creditors in proportion to their respective demands, it being understood that no part of the said surplus which will belong to each of said individual parties of the first part respec- tively after the payment of the copartnership debts, is to be made liable for the individual debts of the other of them. Seventh. And whereas the said parties of the first part are re- spectively justly indebted to sundry persons in divers and sundry sums of money', and are respectively unable to pay the same in full, and are respectively desirous of making an equitable distri- bution of their property and effects among their creditors, now, therefore, 662 . FORMS. Eighth. Tlie parties of tlie first part, in consideration of tlie premises and of the sum of one dollar to each of them in hand paid by the party of the second part, the receipt whereof is here- by acknowledged, have respectively granted, bargained, sold, assigned, delivered over and conveyed, and by these presents do respectively grant, bargain, sell, assign, deliver over and convey unto the party of the second part, his successors and assigns, all and singular the estate and property, real and personal, of every kind and nature, and wheresoever the same may be, of the said parties (;f the first part, which is held and owned by them respectively as their separate and individual property, to have and to hold the same and every part and parcel thereof with the appurtenances, to the party of the second part, his successors and assigns, in trust nevertheless to and for the following uses and purposes : yinth. The party of the second part shall forthwith take possession of all and singular the estate, property and effects liereby lastly above assigned and conveyed or intended so to be, and shall with all reasonable diligence sell and dispose of the same, and convert the same into monej', and shall collect any and all claims of every kind and nature hereby lastly above as- signed, due or owing to the parties of the first part respectively, so far as the same sliall prove collectible. Tenth. Out of the respective estates, property and claims of the said parties of the first part hereby lastly above assigned, or the proceeds thereof, the said party of the second part is author- ized to pay and retain all reasonable costs, charges and expenses of carrying into effect this assignment in this behalf out of the respective interests assigned, including a lawful commission to the party of the second part, for his services in executing and carrying out this trust in this behalf by this instrument. Eh-'tx'nth. The party of the second part is directed, out of the residue and remainder of said respective individual estates, prop- erty and proceeds, to pay before the payment of any other debts of said respective parties of the first part any and all wages and salaries actually owing to the employees of eacii of the said par- ties of the first part respectively, at the time of the execution of tliese presents, and should the respective assets of the said par- ties of the first part not be sufficient to pay in full all the said re- spective claims, then to apply the said respective assets to the payment of the said claims owing by the said parties of the first part respectively pm rata to the amount of each such claims, and after the payment of the same in full. Twelfth". The party of the second part is directed, out of the residue and remainder of said individual estates, property and proceeds, to pay and discharge all the private and individual debts of the parties of the first part, or either of them, whether FORMS. 663 due or to grow due, as follows : To apply and devote the estate, property and proceeds belonging to each of the said parties of the first part respectively, to the payment of his individual debts, so that no part of the estate, property or effects belonging to either of the parties of the first part, individually, shall be devoted or appropriated to the payment of the individual debts of the other of them. Thirteenth. If the individual estate or property of either or any of the parties of the first part shall be insufScient to pay his unpreferred individual debts in full, then the party of the second part is directed to apply the same to the payment of said debts, ratably and in proportion to their respective amounts. Fourteenth. If the individual property and estate of the par- ties of the first part, or any or either of them, shall be more than sufficient to pay their respective individual debts and liabilities, then any surplus that naay remain is to be applied by the party of the second part to the payment and liquidation of any of the partnership debts or any balance thereof which may remain un- paid out of the aforesaid partnership property and effects, said surplus to be applied to the payment and liquidation of said part- nership debts, as hereinbefore provided. Fifteenth. The parties of the first part hereby except from the foregoing assignment, and from the effect thereof, all such property as is by the laws of the United States of America, or otherwise, exempt to them, or any or either of them, from levy and sale under execution, or otherwise, for payment of debts. Sixteenth.. And in furtherance of the premises the said par- ties of the first part do hereby make, constitute and appoint the said party of the second part their true and lawful attorney, irrevocable, with full power and authority to do all acts and things which may be necessary in the premises to the full ex- ecution of the trust hereby created, and to ask, demand, re- cover and receive of and from all and every person or persons, all property, debts and demands due, owing and belonging to the said parties of the first part, or each or any of them, and to give acquittances and discharges for the same, to sue, prosecute, defend and implead for the same, and to execute, acknowledge and deliver all necessary deeds, instruments and conveyances. And the said parties of the first part do hereb;f authorize the party of the second part to sign the copartnership name of the parties of the first part to any check, draft, promissory note or other instrument in writing for the payment of moneys, which is payable to the order of the parties of the first part in their copartnership name. And to sign the copartnership name to any instrument in writing of any name, kifid or nature which maj be necessary to 664 FORMS. more fully carry into effect the object, design and purpose of this trust : And the said parties of the first part respectively in their individual capacities do hereby make, constitute and appoint the party of the second part the attorney of each and ever3' of them, and do hereby authorize him to sign the name of each or any of them to any check, draft, promissory note or other instrument in writing which is payable to the order of each or any of the parties of the first part, or to sign the name of each or any of the parties of the first part, to any instrument in writing whenever it shall be necessary so to do to carry into effect the object, design and purpose of this trust. The party of the second part doth hereb}- accept the trusts and each of them created and reposed in him by this instru- ment, and covenants and agrees to and with the said parties of the first part, and each of them, that he will faithfully and with- out delay execute the trusts created according to the best of his skill, knowledge and ability. In witness whereof, the parties to these presents have here- xvato set their hands and seal the day and year first above written. [Acknowledgment as in Form 32.] No. 34. ASSIGNMEXT BY COPARTNERSHIP, WITH OR WITHOUT PREFER- ENCES. This indenture, made this day of , one thousand eight hundred and ninety , between , residing at , in the city of New York, and , residing at No. Street, in the city of New York, heretofore carrying on business as , at No. , in the city of New York, under the firm name of , parties of the first part, and , of the city of , party of the second part : Witnesseth, That, Whereas the said parties of the first part are indebted, as co- partners, to simdry persons in various sums of money, which they are unable to pay at maturity ; and Whereas the said parties of the first part are desirous of ap- plying all the firm property and assets belonging to them as such copartnership to the payment of the debts of said firm, Now, therefore, the said parties of the first part, for and in consideration of the sum of one dollar to each of them in hand, paid by the party of the second part at or before the delivery of these presents, have sold, assigned, transferred, granted, bar- gained, and conveyed unto the said party of the second part, his suc- cessors and assigns, and by these presents do sell, assign, transfer, FORMS. 665 f rant, bargain, and convey unto the said party of the second part, is successors and assigns, all and singular, the estate and prop- erty, real and personal, of every kind and nature, and whereso- ever the same may be, of the said parties of the first part, which is held or owned by them as such copartnership firm, as aforesaid. To have and to hold the same, and every part and parcel thereof, with the appurtenances, unto the said party of the second part, his successors and assigns, in trust nevertheless for the following uses and purposes : (1) To receive and take possession of all and singular the estate and property above assigned, transferred and conveyed, and to collect and get in all bills, promissory notes, accounts, choses in action, claims, demands and moneys due or owing the said parties of the first part as such copartnership firm, and with all reasonable diligence to sell the real and personal property hereinbefore conveyed and assigned, and convert the said assigned property and estate into money. (2) And out of the proceeds to pay and discharge all reason- able costs, charges, and expenses of carrying out the trust hereby created, including the lawful commission to the party of the second part for his services as assignee under the assignment. (3) And out of the residue of the proceeds to pay the wages or salaFy actually owing to the employees of the parties of the first part as such copartnership firm at the time of the execution of this assignment before any other debts ; and should the assets of the parties of the first part hereby assigned not be sufiieient to pay all the said wages or salaries in full, then to apply the same to the payment of the said wages or salaries^^-o rata to the amount of each claim for wages or salaries. (4) And * out of the residue of said proceeds, to pay in priority, so far as such priority is permitted by the laws of the State of Ifew York, the amount due or to become due [here insert a brief description of the debt or debts preferred. If such debts are to be paid in priority, as between each other, the order of payment should be specified. If the intention is that the one-third of the assets which can be applied to the payment of preferred debts should be applied ^w rata, if insufficient to pay them in full, then add]. [But should the said residue of the proceeds appliable thereto not be sufficient to pay in full the amount due or to become due on said debts so preferentially to be paid, then the said assignee shall apply the same to the "payment of the said notes, ratably and in proportion] ; but in no event shall the preference hereby created exceed the amount of one-third in full of the assigned estate left after deducting the wages or salaries and the costs and expenses of executing the trust ; and should such one-third be in- 666 FOKMS. sufficient to pay the said preferred debts in full, tte same shall be applied to the payment thereof jsro rata in proportion to the amount due to each of said preferred creditors. (5) After payment of the debts hereinbefore provided for in the manner hereinbefore stated, the residue of the said proceeds shall be applied by the party of the second part to the payment in full if all and singular the debts and liabilities now due, or to grow due from the said parties of the first part as co-partnere, and if the residue of said proceeds shall not be sufficient to pay tlie said debts and liabilities in full, then to apply the said residue of said proceeds to the payment of said debts and liabilities ratably and in proportion. (6") And in furtherance of said pi'emises, the said parties of the first part do hereby make, constitute, and appoint the party of the second part their true and lawful attorney, irrevocable, with full power and authority to do all acts and things which may be nec- essary in the premises, to the full execution of the trust hereby created, and to ask, demand, recover, and receive of and from all and every person or persons all property, del)ts, or demands due, owing and belonging to said parties of the first part as such part- ners, and give acquittance and discharge for the same ; to sue, prosecute, defend, and implead for the same, and to execute, ac- knowledge, and deliver all necessary deeds, instruments, and cou- veyances, and to sign the copartnership name of the parties of the first part to any check, draft, promissory note, or other instru- ment in writing for the payment of moneys which is payable to the order of the parties of the first part, and to sign the copart- nership name to any instrument in writing of any name, kind, or nature which may be necessary to more fully carr3' into effect the object, design, and purpose of this trust. (7) The party of the second part doth hereby accept the trust created and reposed in him by this instrument, and covenants and agrees to and with the said parties of the first part, and each of them, that he will faithfully and withoiit delay execute the trust created according to the best of his skill, knowledge, and ability. In witness whereof, the parties to these presents have here- unto set their hands and seals the day and year first above written. In the presence of Seal. Seal. Seal. CrrY AND County of JSTew Yoek } On the , before me personally came , to me severally known, and known to me to be the persons described FOKMS. 667 in and who executed the foregoing instrument, and severally acknowledged that they executed the same. No. 35. ASSIGNMENT WITH PREFERENCE. [As in Forms Nos. 32, 33 and 34, to the *, and then insert:] Out of the residue of said proceeds to pay in priority so far as such priority is permitted by law all and singular the debts set forth and enumerated in a schedule hereto annexed, marked Schedule " A," in full, if the i-esidue of said proceeds applicable thereto shall be sufficient for that purpose, and if the same be not sufficient, then the said party of the second part shall apply such residue of said proceeds to and in the payment of the said debts set forth in said schediile, ratably and in proportion to the re- spective amounts thereof. After payment in full of all the debts designated in Schedule A, as above directed, the said party of the second part shall pay all and singular the debts set forth and enumerated in a schedule hereto annexed, marked Schedule " B," in full, if the said re- maining proceeds shall be sufficient for that purpose, and if the same be not sufficient, then the said party of the second part shall apply the said remaining proceeds to and in payment of -the said debts so set forth and enumerated in Schedule B ratably and in proportion to the respective amounts thereof. [When there are other classes of preferred creditors, the same formula may be re- peated, the various classes of creditors in their order of priority being designated by schedules. After stating preferences, the balance must be applied to the payment of the remaining debts.] And after fully paying and discharging all the aforesaid debts as above provided, the said party of the second part shall pay all and singular all other debts and liabihties of the party of the iirst part, and if such residue be not sufficient to pay and discharge all such debts and liabilities in full, then the said party of the second part shall distribute the said proceeds among all the aforesaid other creditors of the said party of the first part, ratably and in proportion. [Continue as in Form 32, from the **.] SCHEDULE A. Keferred to and forming part of the foregoing assignment, containing a statement of creditors, preferred in the said assign- 668 FORMS. iiieiit, the general nature of the indebtedness to them, and the amount thereof, to wit : To of , the sum of dollars, beina; the amount due him for money lent and advanced by him to tlie assignors, , with interest on , from ,18 , and on thereof from , 18 ; the dates on which said suras were lent. SCHEDULE B. Referred to and forming part of the foregoing assignment, containing a statement of creditors, preferred in said assignment, the general nature of the indebtedness to them, and the amount thereof. To of , the sum of dollars, being tlie amount due him for money lent and advanced on or about the day of , IS , with interest from the day of ,18 , up to which date interest has been paid. No. 36. TITLE TO INVENTORY. (See §§ 315-321.) The following is a full and true inventory of all the estate, both real and personal, of the copartnership firm of C. B. (k Co., in law and equity, and the incumbrances existing thereon, and all the vouchers and securities relating tliereto, and the value of such estate, according to the best knowledge and belief of the individuals composing said copartnership: FORMS. 669 CO CO 5. ■I H ., of the city and county of New York, executed a general assignment for the benefit of creditors to your petitioTier as assignee, which said general assignment was dated on the day of , IS , and was, on the day of , 18 , dnly recorded in the office of the clerk of the city and county of New York, where the said [assiffnor], then resided [or, carried on Ousiness, or, if a firm, where the principal place of business of said copartnership was situated]. That more tlian twenty days have elapsed since the date of said assignment, and that [assignor'], therein named, has failed to present an inventory or schedule as required by law, nor has any inven- tory or schedule of the snid assigned estate been made or deliver- ed, or filed herein.* That your petitioner is unable to prepare and present such inventory and schedule at the present time, for the reasons [here state tiie reasoTis which have prevented the ])reparation of the inventory and schedule]. That your petitionei' is desirous of fully qualifying as such assignee by giving a bond for the faithful (lischarge of his duties as required by law, and that it is desirable that he should give said bond and proceed to the further execution of his trust before the said inventory and sL'hedule can be properly prepared and filed, for the reasons [here state the reasons]. That your petitioner has made diligent in- (juiry to ascertain the extent and character of said assigned ])roperty, and that the property covered by said assignment is, as far as your petitioner has been able to ascertain the same, as fol- lows [here state the general character of the property, with such detail as the assignee has been able to obtain], and that the said ])roperty, according to your petitioner's information and belief, is of the actual value of dollars. That the outstanding amounts due to the said assignor, as appears from his books, are of the nominal amount of dollars, and that the actual value thereof is, as your petitioner is informed and believes, not to exceed the sum of dollars. That the cause of the difference between the actual and nominal value of said claims is as follows [here state the character of the FORMS. 675 claims regarded doubtful or bad]. That the total value of the assets so assigned to your petitioner, as your petitioner is inform- ed and believes, will not exceed the sum of dollars. That no previous application lias been made in the matter of this assignment for leave to file a bond. Wherefore your petitioner prays, that he may have leave to file a provisional bond for the faithful discharge of his duties as such assignee, until siich time as he may be able to present the schedule or inventory of said assigned estate, pursuant to the statute in such cases made and provided. [Verification in usual form.j Affidavits of experts as to value should also be presented. No. 40. ORDER GIVING LEAVE TO FILE BOND PROVISIONALLY. [Title of the matter as in Form 39.] On reading and filing the petition of , verified on tlie day of , 18 , and the affidavit of , verified on the day of , 18 , by which it appears that the actual value of the assets that will come to the hands or control of the petitioner by virtue of the assignment therein mentioned, is dollars, and on motion of M. N., of counsel for said petitioner. It is ordered, That the prayer of said petition be granted ; tiiat the said petitioner have leave to file a provisional bond to the People of the State of New York for the faithful discharge of his duties as assignee, and for tlie due accountiiig for all moneys received by him as assignee of the estate of C. D., under the general assignment executed by the said C. D. to the said A. B., and dated on the day of ,18 , in the penal sum of dollars, and with sufficient sureties to be approved by [one of the judges of this court] ; and that, upon the filing of the inventory and schedule of said assigned estate, the said as- signee do make and file a bond, with like condition, in such amount as may be then ordered or directed. No. 41. Petition Extending Time to File Inventory and Schedule by Assignee. (See § 334.) To Hon. [As in Form No. 39, to the asterisk, continuing :] That thirty days from the date of said assignment will expire on the day of , 18 , and that your petitioner has 676 FORMS. been unable to make and deliver the inventory and schedule re- quired by law, for the reasons [here state the reasons which have prevented the preparation of the inventory and schedule]. [That your petitioner has given a provisional bond as assignee pursuant to an order made in this proceeding on the day of , 18 .J That no previous application has been made in the matter of this assignment for leave to extend the petitionei"'s time to make and deliver such inventory and schedule. Wherefore, your petitioner praj^s that he may be allowed days further time within which to make and file the in- ventory and schedule required by law in this matter. [Verification. J No. 42. Urder Extending Time for Assi^ee to Make [and Deliver Ifiventory ond Seiiediiles. [Title of proceeding.] On the annexed affidavit of , the assignee herein, verified the day of , 18 . whereby it appears that, on the day of , 18 , - made and executed, in due form of law, a general assignment of all his ])roperty to said , and that the time .within which said assignor should have filed the inventory and schedules of his said estate according to law has expired, and that he has not filed the same. And it further appearing thereby that the time within which said assignee should by law make and file said inventory and schedule will expire this day, and that the said assignee has been unable to make and file the same. . Now, upon motion of , Esq., of counsel for said assignee. It is Ordered, that the said iissignee herein be, and he herel)y is, allowed days, from date hereof, further time within which to make and file the inventory and schedule of said assigned estate. Dated, New York, ,18 . No. 43. * Assignee's Petition for Examination of Assignor or Tliird Person to Enable Petitioner to Prepare Inventory and Scliedulcs. [Title of the matter as in Form 39.] I. That on the day of > 18 , [name of assignor] then residing [or, doing business at — or, if a firm, where FORMS. 677 principal place of business was] at , made and executed in due form of law a general assignment to your petitioner for the benefit of his creditors, which said assignment was, on the day of , 18 , duly recorded in the office of the clerk of the county of , and that your petitioner has ac- cepted the trust in said assignment created, and has entered upon the discharge of his duties as such assignee. II. That the said [assignor] has wholly omitted and neglected [or, refused, although duly requested on tlie day of ,18 , by your petitioner] to make and deliver an inven- tory of his said assigned estate, and a schedule of his creditors as required by the statute. [If an examination of a third person is desired, add circum- stances, for instance, thus :] III. That your petitioner is informed and believes that E. F., residing at , who was connected in business with the said CD. as book-keeper, is possessed of information in reference to the extent and value of the stock in trade of said C. D., and as to the amounts due to him, and has in his possession or under his control the book-s kept by the said C. D. in his business as , which information is material to the prej)aration of said inventory and schedules, and that a production of said books is likewise essential for the preparation of the same. TV. That no previous application herein has been made for any order such as is asked below. ' * Wherefore your petitioner prays, that an order may be issued directing that said [name of assignor] and [E. F.] appear and sub- mit to an examination on oath and disclose upon oath any knowl- edge or information that he [or, they — or, either of them] may possess necessary to the proper making of the inventory and schedule required by law, and that the said may be required to produce, upon such examination, any and all books containing entries relating to the business of said C. D. and now in his possession or under his control, and especially [here insert a de- scription of the particular Ijooks so far as known]. [Signature.] [Date.] [Verification.] No. 44. ORDER FOR EXAMINATION OF ASSIGNOR OR THIRD PERSON. [Title of the matter of, as in Form 39.] On reading and filing the petition of , verified on the day of , 18 [and the affidavit of C. D., verified 678 FOKMS; the day of , 18 J, and on application of M. N., of counsel for said petitioner. Ordered, that [name of assisfnorj and [E. F.] be and appear before me [or, one of the judges of the Court of Common Pleas for the city and county of New Yoik] at the court house in the , on the day of , 18 , at o'clock in tiie noon, and submit to examination then and there to disclose, on oath, any knowledge or information they or either of them may possess necessary to the proper making, as required by law, of an inventory and schedule of the estate assigned by the said [assignor] to the said [assignee] by general assignment dated on tiie day of > 18 , and of tiie creditors of said [as- signor]. [If a production of books and papers is required, add :] And the said is hereby directed to produce before me [or, before such judge], at said time and place, all tiie books and papers of said assignor [or eitiier of them], in his possession or under his control, containing any entries in relation to the business or property of said assignor [or either of them], and especially [here designate the books and papers as in the petition]. No. 45. AfHdavitto Obtain Order Antliorizing Assignee to Advertise for Claiuis. (See § 421.) COURT OF COMMON FLEAS FOE THK Cny AND COUNTY 01'" NEW TORK. In the Matter of the General Assign- ) ment of A. B. to C. D., for the V Benefit of Creditors. ) City and County of New York, ss. C. D., being duly sworn, says that on the day of , 18 , A. B., above named, made and execnted, in due form of law, a general assignment of all his property to deponent, ae assignee, for the beneht of his creditors, which said assignment was, on the day of , duly recorded in the office of the clerk of the city and county of New York, where said A. B. then resided and still resides ; that a bond on the part of deponent as such as- signee, approved by one of the judges of this court, was on tlie day of duly filed, and that deponent has accepted saiil trust, and entered upon the discharge of his duties as such as- signee. Deponent further says [that none of the creditors of the said POEMS. 679 A. B., entitled to share ia the distribution of the said trust estate, reside out of the State of New York], or [that deponent has rea- son to believe that certain of the creditors of the said A. B., en- titled to share in the distribution of said estate, reside out of the State of New York]. Sworn to before me this day of , 18 . CD. No. 46. OKDEK OP PUBLICATION OF NOTICE TO CREDITOES. COUKT OF COMMON PLEAS. FOE THE CITY AND COUNTY OF NEW YORK. \Tiil6 as above.] On the annexed affidavit of C. D., and on application of C. D., assignee of the estate of A. B., in trust for the benefit of the creditors of said A. B., and it appearing to my satisfaction [that none of the creditors of the said A. B., entitled to share in the distribution of the said trust estate, reside out of the State of New York], or [that certain of the creditors of the said A. B. entitled to share in the distribution of the said trust estate reside out of the State of New York] : Ordered, that the said C. B., assignee of the said trust estate, be and he hereby is authorized and empowered to advertise by publication for creditors to present to him their claims against the said A. B., with the vouchers duly verified, on or before a day to be specified in said advertisement or notice, not less than thirty days after the date of the last publication of such notice, which said advertisement or notice shall be published once in each week, for six successive weeks, in the newspaper, pub- lished in the county of , where said assignment was made ; lam,d where creditors reside out of the State, add ;] and also once in each week, for six successive weeks, in the , the official newspaper of this State. [This order should be signed by the county judge or judge of Court of Common Pleas, and filed in the office of the clerk of the county where the assignment is recorded.] No. 47. NOTICE TO CREDITORS. In pursuance of an order of Hon. , county judge of county [or, one of the judges of the Court of Common Pleas for the city and county of New York], notice is hereby 680 FORMS. given to all persons having claims against [assignors], lately- doing business in tlie city of New York under the firm name of , to present the same, with the vouchers thereof duly veri- fied, to the subscriber lassignee], who has been duly appointed assignee of said [assignors'], for the benefit of their creditors, at his office, No. street, in the city of New York, on or before the day of , 18 . Dated New York, the day of , 18 . , Assignee. [The day named in the notice must he not less than thirty days after the date of the last publication.] No. 48. PROOF OF DEBT. State of , County of , ss. , being duly sworn, doth depose and say : That he is ; that the annexed statement of the account of , lately doing business at , in the State of , is just, true and correct ; that there is now due the sum of dollars ; that no part thereof has been paid or satisfied, and that there are no set-offs or counter-claims thereto to the knowledge or belief of deponent. Sworn to before me this day of , 18 . No. 49. Petition for Leave to Compromise a Debt Due tlie Estate. (See § 377.) [Title.] To Hon. The petition of A. B., of , respectfully shows : That on the day of , 18 , C. D., residing at [or, who carried on business at — or, if a firm, whose principal place of business was at ], made and executed, in due form of law, a general assignment to your peti- tioner for the benefit of his creditors, which said assignment was, on the day of , 18 , duly recorded in the office of the clerk of county. That your petitioner accepted said assignment and entered upon the execution of said trust.* That among the property so assigned to your petitioner is a certain claim against the firm of E., F. & Co., of , FORMS. 681 amounting,- as appears by the schedules filed by the said C. D., and from his books, to the sum of dollars. That on or about the day of , 18 , the said firm of E., F. & Co. failed and suspended business, and have proposed to their creditors a settlement of forty cents on the dol- lar ; that your petitioner has examined into the statement and affairs of said firm ; that the total liabilities of said E., F. & Co. amount to $ , and their assets, to the best of deponent's knowledge, do not exceed the sum of $ , and that the siiid projjosition of settlement appears to your petitioner to be just and fair. Wherefore your petitioner prays your Honor's instruction and direction in the premises, as to whether your petitioner shall accept the said offer of composition, and shall compound the said indebtedness upon the terms hereinbefore stated, etc. Dated, No. 50. Order for Leave to Compromise a Debt Due the Estate. (See § 377.) At a Term, etc. [Title.] Upon reading and filing the petition of A. B., verified on the day of , 18 , and on application of X. Y. , of counsel for said petitioner. It is Ordered, that the said A. B. be and he is hereby authorized to settle and compound the in- debtedness of E., F. & Co. due to the assigned estate of C. D., upon receipt of 40 per cent, of the said indebtedness [or dirtct reference to take testimony and report]. No. 51. PETITION FOE CITATION FOlt FINAL ACCOUNTING. (See § 454.) PETITIOK BY ASSIGNEE. In the Matter of Final Accounting 1 of , as Assignee of the j Estate of A. B., under a General |- Assignment for Benefit of Credit- j ors J To'fhe Court of Common Pleas for the City and County of New York : 6S2 FOUMS. The petition of tiie abo\'e-nained assignee respectfully shows : I. That on the day of , a.d. 18 , A. B., residing in the city, county, and State of xfew York, at No. , Street, executed in due form a general assignment to your peti- tioner for the benefit of creditors, and that the petitioner duly accepted said assignment and trust. II. That said assignment w;is recorded in the office of the clerk of the city and county of New York on the day of its exe- cution, and petitioner qualified as such assignee and entered upon the execution of his trust. III. That the inventory and schedules, as required by law, were made and filed by your petitioner on the day of , 18 , in the office of the clerk of New Yoik ; and that there- after petitioner gave a bond as such assignee in the form, for the sum and approved as required by the statutes of New York. IV. That upon the prayer of this petitioner an order was made by Hon. , one of the judges of this court, on the day of , 18 , authorizing the petitioner to advertise for creditors to present their claims to him against said assignor on or before a day to be therein specified ; that said notice was published as provided by said order, and that a copy thereof was duly mailed to each creditor whose name appears on the books of the assignor, postage prepaid, at least thirty days before the day specified in said advertisement or notice, as appears by the affidavit of said mailing hereunto annexed. V. That the time uithin which claims were to be presented to petitioner as specified in said notice expired on the day of , 18 ; and that creditors, exceeding twenty-five in number, have presented claims against the assignor to your petitioner, and are interested in the trust fund in the hands of petitioner by vir- tue of the assignment. VI. That the names and address of creditors who have pre- sented claims are as follows : And your petitioner therefore prays that a citation may issue out of, and under the seal of, this court, to all persons interested in said estate, requiring them to appear in court upon some day to be specified therein, and to show cause why a settlement of the account of the assignee, your petitioner, should !iot be had, and, if no cause be shown, to attend the settlement of said account. [ Verification.'] FORMS. 682a No, 51a. ASSIGNEE'S ACCOUNT. (See §§ 443, 558.) [Title.] To the Hon. the Court of Common Pleas for the city and county of JVeiv York : 1, A. B;, of , do render the following account of my pro- ceedings as assignee of C. D.: On the day of , 18 , the said 0. D , then residing or carrying on business at , made and executed in due form of law a general assignment of his property and estate to me in trust for the benefit of his creditors, which said assignment was, on the day of J 18 , duly recorded in the ofi&ce of the clerk of the county of . I accepted said assignment and entered upon the execution of the trust thereunder, and took possession of the said assigned property. On the day of j 18 , an inventory of the said assigned property, and a schedule of creditors, as required by law, was made and delivered by said 0. D. \or, by me], and was on said day duly filed in the office of the clerk of the Court of Common Pleas, for the city and county of New York, by which it appears that the debts and liabilities of the above-named C. D. amount to the sum of dollars, and his nominal assets to the sum of dollars, and that the actual value of the same was dollars. Schedule "A," hereto annexed, contains a statement of all .the property contained in said inventory, sold by me at public or private sale, with the prices and manner of sale ; which sales were fairly made by me at the best prices that could then be had, with due diligence, as I then believed ; it also contains a statement of all the debts due the said estata and mentioned in said inventory, which have been collected, and also of all interest for moneys re- ceived by me, for which I am legally accountable. Schedule "B," hereto annexed, contains a statement of all property belonging to the estate which have come into my hands not included in the said inventory. Schedule " C," hereto annexed, contains a statement of all debts in said inventory mentioned, not collected or collectible by me, to- gether with the reasons why the same have not been collected and are not collectible, and also a statement of any property mentioned in said inventory unsold, and the reasons of the same being unsold. No other assets than those in said inventory, or herein set forth, have come to my possession or knowledge, and all the increase or decrease in the value of any assets of said estate is allowed or charged in said schedules "A." and " B." Schedule "D," hereto annexed, contains a statement of all moneys paid by me for all necessary expenses for said estate, to- gether with the reasons and object of such expenditure. That on the day of , 18 , an order was duly made by Hon. , judge of , authorizing the publication of a notice to creditors to present claims, and that such notice was duly published as required by said order, and that a copy of said notice was duly mailed to each of the creditors whose names appear in the books of the assignor as required by the rules of this court, as will 6825 FORMS. appear by the order, notice and due proof of publication and mail- ing herewith filed. Schedule " E," hereto annexed, contains a statement of all the claims of creditors presented' to me in pursuance of said notice, together with the names of the claimants, the general nature of the claim, with the amount and the date thereof, and also a state- ment of all moneys paid by me on account of said claims, with the names and the time of such payment. Schedule " P," hereto annexed, contains a statement of all other facts affecting my administration of said insolvent's estate, my rights and those of others interested therein. I charge myself : Amount as per inventory $ Increase as shown by schedule " A" f Property not included in inventory as per schedule "B'M I credit myself : Amount of debts not collected as per schedule " C" I Amount of schedule " D" $ Amount of schedule " E" $ Leaving a balance of $ To be distributed according to the provisions of said assignment, subject to the deductions of the amount of my commissions and the expenses of the accounting. The said several schedules which are signed by me, are part of this account. [Signed.] Dated, New York, ,18 . , Assignee, No. 5 lb. ASSIGNEE'S OATH. City and Countt of New Yoek, ss. : I, A. B., being duly sworn, says, that the charges made in the foregoing account of proceedings and schedules annexed, for moneys paid by me to creditors, and for necessary expenses, are correct ; that I have been charged therein all the interest for moneys re- ceived by me and embraced in said account, for which I am legally accountable ; that the moneys stated in said account as Qollected, were all that were collectible, according to the best of my knowledge, information and belief, on the debts stated in such account at the time of this settlement thereof ; that the allowances in said account for the decrease in the value of any assets, and the charges therein for the increase in such value, are correctly made, and that I do not know of any error in said account, or anything omitted there- from, which may in anywise prejudice the rights of any party interested in said estate. And deponent further says, that the sums under twenty dollars, charged in the said account, for which no vouchers or other evidences of payment are produced, or for which he may not be able to produce vouchers or other evidences of payment, have actually been paid and disbursed by him as charged. Sworn to this day of , 18 , before me. f FORMS. 683 No. 52. ORDKR FOR CITATIOV. At a Special Term of tlie Court of Coininon Pleas for tlie Citj- and Comity of New York, un the day of ,18 . Present, Hon. , Judge. In the Matter of the Final Ac- ] counting of , as As- | sifrnee of tiie Estate of A. B. [- under a General Assignment j for Benefit of Creditors. J On reading and filing the verified petition of the ahoverianied assignee [o/', of , a creditor of said assignor], liated the day of , 18 , and on motion of , attorney for said assignee [or, creditor] : It is ordered that a citation issue herein to all parties interested in the estate assigned by A. B. to the ahove-nained Hssignee by a general assignment for the benefit of creditors, dated the day of , 18 , and recorded iu the office of tlie clerk of the city and county of New York, to appear in court on a day therein to be specified, and to show cause why a settlement of the ac- count of the proceedings of the assignee should not be had, and, if no cause be shown, to attend the settlement of such account. [ When more than tweyityfive creditors have ■proved claims add .•] It is further ordered that said citation be served on each cred- itor who has proved his claim, by depositing a copy of the same, at least thirty days prior to the return day thereof, in the post- office at the place where the assignee resides, duly inclosed and directed to each of such creditors, at his last-known post-office address, with the postage prepaid ; and by publishing such cita- tion once a week, for at least four weeks prior to such return day, in the , a newspaper published iu the city and county of "New York. No. 53. CITATION FOR ACCOUSTING. (See § 459.) The Pkople of the State of New Yoek. to all persons inter- ested in the estate of A. B., assigned to for the benefit of creditors, send Greeting : You and each of yon are hereby cited and required personally to be and appear at a special term of the Comt of Common 684 FORMS. Pleas for the city arid eoutity of New York to be liolden in tlie county conrt-house, in the city of New York, on the day of , IS , at ten o'clock a.m., there and then to show cause why a final settlement of the accounts of , assignee of above-named A. B., insolvent debtor, should not be had, and, if no cause be shown, then to attend the final settlement of the assignee's accounts. In testimony whereof I have liereunto caused the seal of [seal.] the said Court of Common Pleas for the city and county of New York to be hereunto affixed. Witness Hon. , chief judge of the said court, this day of , 18 . , :, CUrlc. Attorney for Assignee. No. 54. ORDER OP UEFEREXCE. (See §§439, 464.) At a Term of, etc. ITitle as !n. Form. No. 22. J A. B., assignee for the benefit of creditors of C. D., under a general assignment made on the day of , 18 , and re- corded in the office of the clerk of the county of , liaving made and filed an account of his proceedings as such assignee, riled herein on the day of , 18 , and a citation having been issued ont of and under the seal of this court to all persons interested in said assigned estate to attend the final settlement of said account : Now, on the said account and the petition of said A. B., filed herein on the day of , 18 , and the papers accompany- ing the same, and on said citation and proof of the due service of the same (and on the objections to said account filed by ), and on application of , attorney for said as- signee (with appearance for other parties) : It is ordered that it bo referred to X. Y., counsellor at law, to take and state the accounts of the said A. B., of his proceed- ings as assignee of the said assigned estate, with authority to the said X. Y. to examine the parties and witnesses on oatli in rela- tion to the said assignment and accounting, and all matters con- nected therewith. And it is further ordered that the said referee take proofs and report as to what persons are entitled to share in the distribution of said assigned estate, and in what priority and proportion. And it is further ordered that any party to this proceeding, and any creditor, ma ' object to any claim presented before said FORMS, 685 referee, and tliat tlie said referee shall thereupon take the proofs and report as to the validity of such contested claims. And it is further ordered that the said reference proceed at , and that days' notice of the time and place of tiie first hearing be given to all creditors who have presented their claims to said assignee, or who have appeared upon the return of said citation. No. 55. KEFEREE'S KEPORT. (See §§ 449, 468.) COURT OF COMMOJSf PLEAS rOE THE CITY AND COtiNTT OF NEW YOEK. In the Matter of the Final Accounting ) of , Assignee of , ) To the Court of Gammon Pleas for the City and County of New YorTc : I, , referee appointed herein, by order dated , to take and state the accounts of the above-named assignee, do re- spectfully report that, having taken and subscribed the oath re- quired of a referee by section 1016 of the Code of Civil Pro- cedure, I proceeded to take proofs, and from the evidence before me, which is hereto annexed and forms part of this report, I find the following : I. That prior to the day of , 18 , the above-named engaged in business in the city of New York under the name of , and that the said then re- sided in II. That on the said last-mentioned date he executed and acknowledged an instrument in writing assigning all his property to the above-named in trust for the benefit of the cred- itors of said assignor. That the following preferences were created in and by said assignment — viz. : [Insert.'] III. That the said assignee joined in the execution and ac- knowledgment of said assignment and accepted said trust. That said assignment was acknowledged by on , and was recorded in the office of the clerk of the city and county of New York on the day of , 18 . IV". That schedules of the assigned estate and of the liabilities of the assignors, duly verified by on , were filed in the office of the clerk of this court on the day of 18 , showing tlie liabilities of the assignors to be $ , with $ nominal assets and $ actual assets ; and on the 686 FOUMS. day of , 18 , Hon. , one of tlie judges of this court, ordered the assignee to file a bond in the penalty of $ V". That on the diiy of ,18 , the saifl assignee pre- sented to the Hon, , one of the judges of this court, his bond with , residing at , and , resid- ing at , as sureties, in the penal snm of $ , which bond was, on the said last-named day, approved by the said last-named judge, and was tiled on said day in tlie office of the clerk of the conrt. VL. That the said assignee having applied to this court upon petition, verified by him on the day of , 18 , for an order to advertise for creditors to present their claims, with the vouchers duly verified, an order was thereupon made on tlie d ly of , the Hon. presiding, authori2ing such advertisement to be made in the newspaper, published in , and , once in each week for weeks. VII. That the said advertisement was published as directed in each of said papers, commencing on the day of , 18 , and the following is a copy of such advertisement : [Insert copy.^ VIII. That a copy of such advertisement, inclosed in a sealed envelope, on which was indorsed a direction that if the same was not delivered in ten davs it should be returned to and with the proper postage prepaid thereon, was deposited in the post-oflice in the city of New York, directed to each of the cred- itors whose names appear on the books of the said assignor. That tlie following and no others of said notices have been re- turned by the postmaster — viz., those addressed to IX. That the following persons have presented claims duly verified to the assignee— viz. ; AMOUNT. Fon^is. 687 X. That on tlie day of , 18 , tlie said assignor pre- sented to this court an account of his proceedings as assignee, veriried by iiis oatli thereto, made on the day of , 18 , stating his account as follows— viz. ; Dr. Inventory of Stock $ Inventory cf Accounts — Increase by — Cr. Decrease $— — Expenses Di\ idtnds paid to Balance | XI. That upon petition of the said assignee, verified by hitn on the day of , 18 , this court, by order made by Hon. , one of the judges thereof, directed a citation to issue to ill] persons interested, requiting them to appear in this court and attend the final settlement of the accounts of said as- signee. That such citation was thereupon issued out of and under the seal of this court, returnable on the day of , 18 . Tiiat by order of this court, duly made on the day of , 1? , the said citation was ordered served by publication in Xir. Tliat said citation was duly served in the following man- ner upon XIJI. That on the return of said citation the following parties and nijne other appeared in this court : [Insert namefi.l XIY. That the following objections to said account were filed hy the following parties ; [Insert objections. ~\ %Y. That by order made by the Hon. , on the day of , 18 , this court referred the said account to me to take and state the same, and XVT. That I issued a summons to attend the reference before mo at my office, No. , street, on tlie day of J 8 , at o'clock. All which notice was duly served on XYII. That the following named persons appeared before me on said reference in person : [Insert names'], and the following by counsel — viz. : [Insert names']. XVIII. That the said assignee, immediately after the approval and filing of this bond, entered upon his duties as such assignee ; FORMS. that he reduced to possession the assigned estate, consisting of ; that he sold , realizing therefrom $ ; that he col- lected $ ; that he paid out and expended for , $ ; that he has faithfully performed the duties of his said trust ; that he should be allowed the following expenditures as neces- sary in the execution of said trust — viz. : [Jnserf\, and that his accounts should be stated, and I do hereby state them as fol- lows — viz. : Dr. To Inventory of Stock $ To Inventory of Accounts To Increase (Schedule A) Total $ Cr. By decrease of Stock $ Accounts Expenses Payments to Creditors — viz. : No. 56. FIJfAL DECREE. At a Term, etc. [Title of Proceed in f/s.] A general assignment having been made by C. D. to A. B. for the benefit of creditors, dated the day of , and re- corded in the office of the clerk of tlie county of on the day of , and the said A. B. having accepted the trust thereby created, and having on the day of filed his bond, duly approved, for the faithful discharge of his duties as such assignee, and having thereafter duly advertised for cred- itors to present their claims, duly verified, against said C. D. to him, and the time for the presentation of tfie same having ex- pired, and the said A. B. having appeared and presented his ac- count as such assignee to this court, and a citation dated on the day of having been duly issued herein to all persons interested in said assigned estate to attend the settlement of the said accounts, returnable on the day of , and proof of the due service of said citation upon [here recite ser- vices and appearances], (and objections having been presented to said report by ), and it having been referred to , Esq., counsellor at law, to take and state said account (reciting provisions of order of reference), and the said referee having made and filed his report on the day of . and due notice of the filing of said report having been given to FORMS. 689 , and exceptions thereto having been filed by Now upon reading all the papers and proceedings hereinbefore recited, the said report and the testimony, exhibits and vouchers thereto annexed, and the objections to said report tiled by the said , and after hearing , of counsel in behalf of , and [recite appearcmcesj, and due consideration thereupon having been had. It is ordered, adjudged and decreed : First. That the said report be and the same is hereby in all respects confinned, and the account of said A. B., assignee as aforesaid, audited and allowed as therein stated. Second. That oat of the funds in the hands of the said A. B., assignee of the said estate of C. D., the said A. B. retain dollars as and for his lawful commission as such assignee ; that he pay to , the attorney for said assignee, the sum of $ , for his costs and allowances in this proceeding ; and the further sum of $ to , referee aforesaid, for his fees as such referee ; and out of the rest and residue of said funds remaining in the hands of said assignee, after deducting the costs and expenses aforesaid, said assignee is directed to make payment between the following-named creditors, preferred in said assign- ment, the amounts of their several preferences being the sums set opposite their names respectively as follows : in full ; and out of the rest and residue of said funds remaining in the hands of said assignee, said assignee is directed to make payment between the following-named creditors, whose several claims are settled and adjusted at the sums set opposite their names respec- tively : [Mere insert names of creditors cmd amounts due them.] Third. That the said assignee do take good and sufficient vouchers for each and every payment so made ; and if, after rea- sonable diligence, any of the persons so entitled to share in said distribution cannot be found, or shall decline or neglect to accept their said share, then the share so belonging to such person shall be deposited in the Trust Company to the credit of such persons. It is further ordered, adjudged and decreed, that upon compli- ance with the foregoing provisions the said assignee shall, upon presenting due proof of the same to this court, be entitled to an order relieving him of his liability as such assignee, and releasing the sureties upon the said bond filed by the said A. B., as as- signee of said estate, from all liability upon matters included in the aforesaid accounting, to all creditors who have appeared, and to such creditors as have not appeared after due citation, and to such creditors as have not presented their claims after due adver- tisement ; and that the said application may be made without further notice. 44 690 FORMS. No. 57. COMPOSITION DEED.: Whereas, A. B., of , does justly owe and is indebted unto us, his several creditors, in divers sums of money, but by reason of many losses, disappointments and other damages hap- pened unto the said A. B., he has become unable to pay and sat- isfy us our full debts and just claims and demands, and therefore we, the said creditors, have resolved and agreed to undergo a cer- tain loss and to accept of twenty-five cents for every dollar owing by the said A. B. to us the several and respective cred- itors aforesaid, to be paid in full satisfaction and discharge of our several and respective debts. Now, know all men by these presents, that we, the several creditors of the said A. B., do for ourselves severally and respectively, and for our several and re- spective heirs, executors and administrators, covenant, promise, compound and agree to and with the said A. B. and between ourselves, that we will accept, receive and take of and from the said A. B., for each and every dollar that the said A. B. does owe and is indebted unto us, the said several and respective cred- itors, the sum of twenty-five cents, to be paid in the manner fol- lowing, that is to say : [in instalments to be secured by notes of debtor indorsed by third person, or as the case may be, and to be delivered by a day certain]. And we, the said creditors, do further covenant and agree, that neither we, the said several and respective creditors, nor either of us, shall or will, at any time or times hereafter [except upon default in the delivery or payment of said notes so indorsed as aforesaid, or either or any of them], sue, arrest, molest or trouble the said A. B., or his goods and chattels, for any debt or other thing [now due or owing to us or any of us — or, for any liability now existing against the said A. B., in favor of us or either of us], provided, however, that should default be made by the said A. B., in the delivery of ih& said notes indorsed as aforesaid, and within the time aforesaid [or, upon default in the payment of said notes, or any or either of them], these presents shall be void and of no effect, [provided always, and it is hereby agreed and declared, that these presents shall not in anywise prejudice or affect the right or remedies of any creditor against any surety or sureties, or any person or persons other than the debtor, his heirs, executors or administrators, nor any security which any creditor may have or claim for his debt or debts] [and it is further expressly understood and agreed, that unless the said composition shall be accepted by all the creditors of the said FORMS. 691 A. B., on or before the expiration of dayo from the date of these presents, these presents shall be void and of no effect]. And all and every of the grants, covenants, agreements and conditions herein contained, shall extend to and bind our several executors, administrators and assigns, as well as ourselves. In witness whereof, we, the said several creditors of said A. B., have hereunto set our hands and seals this day of , 18 . [Other Forms of Composition Deeds and Letters of License may be found in Abbott's Clerk's and Conveyancer's Assistant, pp. 304r, et seq.'\ GENERAL INDEX. GENERAL INDEX. (The References are to pages.) AC'CEPTAISTCE of assignment by assignee, 162. when to be signified, 163. must be in writing and acknowledged, 163. by one of several assignees, 163. by creditor presumed, 115, 314. when assignee renounces assignment, after acceptance, 508. ACCOTJNT, bill in equity for an accounting, 543. assignee's, form of, 549, 567. verification of, 551. examination of, 551. objections to, 553. compelling, on proceedings for accounting, 578. ACCOUNTING, 539-580. by assignee, 539. jurisdiction of, 539. proceedings by different creditors for, 540. action for, parties to, 541. complaint in, 543. defenses to, 543. order of reference on, 545. notice of hearing, 546. notice to creditors to present claims, 547. proceedings before referee on, 548. referee's report on, 559. exceptions to, 560. final, 538. hearing and decree, 561. account, form of, 549. verification of, 551. examination of, 551. 696 GENEEAL INDEX. ACCO'D'NTING— continued. vouchers, 553. allowances to assignee, 554. commissions, 557. proceedings for, under the general assignment act, 561. partial accountings, 563. petition for, 564. who may petition, 564. when ordered, 566. what creditors are barred by proceedings for, 566. assignee's account, 567. citation for accounting, 567. who must be served, 568. service of, 568. powers of county court on, 570. proceeding on return of citation for, 571. reference on, 572. proceedings before referee on, 572. proof of claims on, 573. composition, proceedings on, 574. referee's report, 576. appeals, 577. enforcement of decree, 577. compelling accounting, 578. disputed claims may be determined on, 527. by trustees of insolvent debtors, 579. discharge of assignees and sureties on, 583. ACCOUNTS, assignee must keep, 439. ACKNOWLEDGMENT of execution of assignment, 163. ACTIONS by assignee, 456. right to sue, 456. parties to, 458. defenses in, 462. to establish assignment, 325. to recover property fraudulently transferred by as- signor, 445. to collect estate, 456-476. See Collecting Estate. by and against assignee, evidence in, 301, 375. against assignee for property fraudulently attained by assignor, 442. GENERAL INDEX. 697 AGTWHS— continued. to compel accounting, 541. See Accounting. for accounting under general assignment act, 561. See Accounting. by creditors to set aside assignment. See Avoidance of Assignment. against assignee, 500. by trustees to recover property, 487. liability of assignee for failure to prosecute, 493. amendment of assignment by, 363. in aid of assignment, may be maintained when, 330. ACTUAL FRAUD. See Fraud on the Face of the Instru- ment. ADMINISTRATION OF THE ESTATE, 391-587. jurisdiction of county court and court of common pleas, 391-396. See Jurisdiction. inventory, 397-407. See Inventory. Schedule, 406. See Schedule. Bond, 407-415. See Bond. assignee's powers and duties, 416-434. See Assignees. taking possession and custody of property, 435-455. See Possession. collecting in estate, suits by assignee, 456-476. See Collecting Estate. sale of assigned property, 477-487. See Sale. liability of assignees, 488-503. See Liability. assignee, death of, 504-530. See Death. removal of, 504-530. See Removal. resignation of, 504-530. See Resignation. disability of, 504-530. See Disability. 698 GENERAL INDEX. ADMINISTKATION— cowfrnwe^. claims against estate, 521-538. See Claims. notice to creditors, 531-538. See Notice. proof of debt, 531-538. See Proof of Debt. accounting, 539-580. See Accounting. termination of trust, 581-587. See Teust. ADMINISTRATOES. See Executors. AGENT, provisions for employment of, 264. employment of assignor by assignee as, 441. AGENTS, power of assignee to appoint and dismiss, 264, 440, 441. allowance of expenses for, 554. assignee personally liable to, for compensation, 493. AGREEMENT to give preferences, 213. to join in composition, 597. ALLOWANCE of compensation to assignee, 557. of expenses to assignee, 554. to voluntary assignee in bankruptcy, 310. ALTERATION of assignment by assignor, 360. AMENDMENTS to assignment, 360. by action, 363. of proceedings under the "two-thirds act," 75. of inventory and schedule, 405. AMOUNT of property assigned, 170. APPEAL, in proceedings under the " two-thirds act," 75. in proceedings under the "fourteen days act," 106. the general assignment act, 392. for accountings, 577. separate not allowed, 577. APPRAISAL of real estate, by assignee, 405. ARREST, proceedings to obtain exoneration from, 77. fraudulent assignment as ground for, 324. when debtor not liable to rearrest, 104. See Exemption of Insolvent from Arrest. ASSAILING AN ASSIGNMENT as fraudulent and void, 312. who may not assail, 313. See Avoidance of Assignments. GENERAL INDEX. 699 ASSENT of creditors to assignment, 115, 116, 124, 313, 314. presumption of, 115. the English rule, 115, 134. in assignment directly to creditors, 114. ASSETS, withdrawal of, 385. ASSIGNABLE, what is, 173-191. ASSIGNED PROPERTY. See Property Assigned. ASSIGNEE. See Joint Assignees. who may be, 146. creditor may be, 146. relative may be, 147. selection and qualification of, 146, 147. non-residence will not disqualify, 513. of insolvent corporations, 130, 135, 146. in bankruptcy avoiding assignment, 307. protection of voluntary assignee in bankruptcy, 309, 310. allowance of expenses to voluntary assignee, 310. acceptance by, in assignment, 163. execution of acceptance by, 163. refusal to accept, 163. when to file inventory and schedule, 406. bond of. See Bond. exemption of, from liability, 365. acts of, subsequent to assignment, 395. declarations of, as evidence, 303. payment of preferences by, 539. actions by, to establish assignment, 335. to collect estate. See Collecting Estate. may join in petition under " two-thirds act," 30. allowance to, for money paid sureties on bond, 408. takes subject to liens, 341. liens paid by, allowed, 348. payments to creditors, 349. made in defending trust and preserving estate, 351. charged with costs, when, 356. commissions of, 351, 557. allowances to, for expenses, 554. in foreign assignment, efEect of possession of, 386. title of, as against unfiled chattel mortgages, 447. payments made by, in mistake, 393. appraisal of real estate by, 405. 700 GENERAL INDEX. ASSIG'NEE— continued. breach of trust by improper sale, 486. liability for, 490. liability of, 488-503. See Liability of Assignee. right to set aside assignor's fraudulent conveyance, 175, 445. suits against, by creditors, 500. survivorship of, 504. renunciation by, 506, 508. resignation of, 504-520. disability of, 504-520. removal of, 504^530. death of, 504-520. misconduct of, 509. insolvency of, 149, 512. incapacity of, 512. discharge of, 583. powers and duties of, 416-434. rights of, in consigned goods, 183, 184. termination of trust, 581. discharge of, 583. See Discharge. of insolvent debtors under Revised Statutes. See Trustees of Insolvent Debtors. notice of assignment of claims, 438. taking possession by, 435. inventory and appraisement of property, 435. custody of property by, 437. continuing assignor's business, 251, 292, 479. when protected, 310, 348, 353. how dealt with by court, 488. collections of debts and recovery of property by, 457. actions by, 456, 457. sales by, 477-487. See Sale of Assigned Property. cannot purchase at sale, 483, 485. conveyance by, 486. distribution by, among creditors, 521, 582. accounting by. See Accounting. final accounting by, 538. GENERAL INDEX. 701 ASSIG'^'EE— continued. statutory and voluntary, distinction between, 416. statutory, oath of, 416. when Tested with property, 417. powers of, 417. voluntary, rights of, 420. takes subject to liens, 421. not a bona fide purchaser, 423. stoppage in transitu after assignment, 422. mechanics' liens, 423. contracts of assignor, 424. application to court for instructions, 425. rights of assignor which assignee cannot enforce, 430. duties of, 430. joint, 432, joint trustees under Eevised Statutes, 433. power to mortgage and lease, 267. to effect insurance, 263, 437. to pay taxes and rent, 263. to employ agents, 264, 440, 441. to compound and compromise debts, 262. to defend suits against assignor, 266. duty as to custody of property, 437, 438. insurance of property, 437. care of intangible property, 437. to keep accounts, 439. right of, to reject property, 439. to dispute claims, 522. ASSIGNMENTS of debtors' property under " two-thirds act," when ordered, 46. to whom made, 46, 47. what passes by, 48. by debtor under "fourteen days act," 103. voluntary, 368. See General Assigkments ; Acceptance ; Previous Assign-ment ; Foreign and Domestic Assignments. ASSIGNOR, reservation of benefit to, 248. trusts for, 247. resulting trusts for, 250. solvency of, 275. 702 GENERAL INDEX. ASSIGNOR— cowifiretfed reserTation of powers to, 250. contemporaneous, acts of, 278. continuance of business by, 251, 293, 479. execution of assignment by, 150. fraudulent intent of, defeats assignment, 268, 270. See Fraudulent Intent. declarations of, when evidence, 301, 303, 463. acting as agent, 441. refusal of, to furnish inventory, 456. acts of, subsequent to assignment, 289. alteration of assignment by, 360. rights of, which assignee cannot enforce, 430. suits against, power of assignee to defend, 266. ATTACHMENT of property fraudulently conveyed by assignment, 317, 319. what property may be levied on, 319. assignor may move to vacate, 290. choses in action not subject to, after assignment, 320. proceedings by creditors based on, 321. foreign assignments, 374. ATTACKING ASSIGNMENT. actions, where property fraudulently transferred, 450. See Avoidance. ATTORNEY, execution of assignment and acknowledgment by, 165. assignee cannot convey by, 486. provision for employment of, 264. costs collected in action against assignee belong to, 556. AUCTION, sales at, by assignee, 483. AVOIDANCE of assignments, proceedings on, 312-358. in general, 312. creditors who assent, 312. when creditors held to have accepted assignment, 31 4. unsuccessful attacking creditors may share in assignment, 316. creditors who are not injured, 316. proceedings by attachment, 317, 319. fraudulent intent of debtor, 317. what property can be levied on in proceedings by attach- ment, 319. GENERAL INDEX. 703 AYOIDA'NGE^continued. proceedings by creditors based on attachment, 321. fraudulent assignment as ground for arrest in ciyil action, 324. proceedings by execution, 324. assignee's action to establish assignment, 325. proceedings supplementary to execution, 326. by creditors in equity, 327. creditors' suits, 330. instances in which judgment and execution are not essential, 331. parties, 333. complaint, 334. bill of particulars, 336. defences, previous actions, 336. injunction and receiver, 337. inspection of debtor's books, 338. trial, 338. priority of creditors— Ks pendens, 340. as to real estate, 341. personal property, 344. time at ■which plaintiff's right attaches, 346. repelling presumptions of fraud by parol evidence, 339. protection of assignee, 348-353. assignee takes subject to liens allowed for, 348. liens paid by assignee allowed, 348. payments to creditors, 349. made in defending trust and preserving estate, 351. assignee's commissions, 351. title of purchaser from assignee, 354. costs, 356. relief granted, 357. enforcement of judgment, 358. actions attacking assignment on ground of fraudulent transfers, 450. AVOIDING assignment by assignee in bankruptcy, 308. BADGES of fraud, 242. BAIL may be secured by assignment, 215, 254. discharge of, 55. 704 GENERAL INDEX. BA'NK, money in, passes to assignee, 183. BANKING ASSOCIATIONS, assignments by, 133. BANKKUPTCY, distinguished from insolvency, 4. the right of State to legislate on the subject of, 9. assignments, 365. assignments Toidable in, 307. levy before, 309. protection of voluntary assignee in, 309, 310. right of foreign assignee in, to sue, 367. BILL in equity for accounting, 543. to set aside assignment, 337 et seq. parties to, 333. form of, 334. relief on, 357. of particulars in creditors' suit, 336. BONA FIDE purchaser, assignee not, 433. purchaser from assignee, protection of, 354. BOND of assignee, 397, 407-415. not essential to validity of assignment, 408. failure to file, 409. extension of time to file, 407. authority of assignee before giving, 409. form and amount of, 410. must be legibly written, 411. provisional, 413. prosecution of, 415. additional security may be required, 415. by substituted assignee, 515. sureties in, liability of, 413. discharge of, 414. See Sfeeties. BOOKS of, account, delivery of, to assignee, 435. production of, how compelled, 451. inspection of, 338. BEBACH of trust, liability of assignee for, 486, 490. remedy against, 500. BUSINESS of assignor, continuance of, by assignee, 351, 393, 479. stipulation for, 351. corporations, assignments by, 130. See CoBPOEATiosrs. CHANGE of possession of real property, 395. GENERAL INDEX. 705 CHATTEL MORTGAGES unfiled, title of assignee as against, 447. rights of creditors, 449. CHOSES in action, assignable, 174. pass by foreign assignment, 388. when not assignable, 180, 181. cannot be attached after assignment, 320. CITATION for accounting, service of, 567, 568. proceedings on return of, 571. CLAIMS for damages for torts, when assignable, 174. presentation of, 536. proof of, 535. eilect of failing to present, 536. disputed, reference as to, by trustees of insolvent debtors, 473. notice of assignment of, 438. when assignable, 181. against the United States assignable, 186. effect of private stipulation in composition on, 610. may be determined on accounting, 537. right of assignee to dispute, 533. due estate, compromise of, 363, 468, 476. uncollectable, sale of, by assignee, 485. unliquidated and unaccrued, payment of, 535. proof of, on accounting, 573. See Debts. against assigned estate, 531-538. debts to be paid, 531. ascertaining, 533. claims, notice to creditors, 533. disputed, trial of, 536. preferred debts, 537. wages and salaries, 538. priority of United States, 538. secured creditors, 531. judgments against assignor recovered after assignment, 534. of creditors, power of assignee to compound, 262. fictitious, preference of, 315, 398. composition of, 589. See CoMPOSiTiosr. 45 706 GENERAL INDEX. CLAIMS — continued. unliquidated and unaccrued, 535. debts due partners, 537. interest, 537. statutory trustees, notice, 538. CLEKKS, powers of assignee to appoint, 441. CLOSE of trust by assignee, 581. See Trust. CO- ASSIGNEES. See Joint Assignees. COLLECTING suits by assignee, 456-476. in general, 456. right to sue, 456. duty as to collections, 457. parties, 458. defenses, 462. evidence, declarations of assignor, 463. set-ofE, 4B4. compromise of debts due the estate, 468. costs, 470. security for, 471. statutory trustees, 473, 474. reference as to disputed claims, 472. set-off, 474. compromise of claims, 476. COLLECTION of debts by assignee, 456. duty as to, 457. COMITY, inter-State, 364. COMMISSIONS of assignee under general assignment, 351, 557. of trustee of insolvent debtor, 584. COMMON PLEAS, COUET OP, jurisdiction under general as- signment act, 394, 395. rules of, relating to assignment, 628. COMPENSATION of assignee. See Commissions. COMPLAINTS in actions for accountings, 543. in creditors' suits, 334. COMPOSITIONS AND COMPOSITION DEEDS, 589. in general, 589. proceedings on, 574. smaller sum not satisfaction for larger, 589. composition an exception, 591. consideration of, 591. GENERAL INDEX. 707 CO MPOSITIONS— COW tinned. how efEectedj 593. power of partner to compound, 594. executed by portion of the creditors, 594. agreement to join in, 597. fraudulent representations by debtor, 599. what debts are included, 601. reservations against sureties, 603. must be strictly performed, 604. secret stipulations, 606. private, effect of, on claims of creditors, 610. securities for undue advantage to one creditor void, 611. new promise after, 613. COMPOSITION DEEDS. See Composition. COMPOUNDING with creditor, power of, to assignee, 263. debts due the estate, 263, 468, 476. See Composition. COMPROMISE. See Compounding. CONCEALING- property from trustee, penalty for, 487. See Secreted Peopeett. CONDITIONAL preferences, 217, 244, 246. CONSENT of creditors to discharge of insolvent, 19. discharge of assignees and sureties by, 583. CONSIDERATION of assignments, 155. CONSIGNED goods, rights of assignee in, 183, 184. CONSTRUCTION of assignments, 335, 236, 237. CONSTRUCTIVE fraud, 337. See Feaud feom Extrinsic Circumstances. CONSTITUTIONALITY of insolvent laws, 59. CONTENTS of assignment, 154. CONTINGENT interests assignable, 174, 175. liabilities may be secured by assignment, 354. CONTINUANCE of assignor's business by assignee, 479. stipulations for, 251. CONTRACTS of assignor, rights of assignee in, 424. obligation of, impairment of, by State insolvent laws, 11. CONVERSION,' right of action, assignable, 174. CONVEYANCE by assignee, 486. CONVEYANCES, fraudulent. See Fraudulent Conveyances. CO-PARTNERSHIPS. See Partnerships. CORPORATIONS, consent of, as creditors under '•' two-thirds act," 21. 708 GENERAL INDEX. COEPOB.ATIO'^S— continued. may make assignments, 125, 130. statutory restrictions on right to assign, 137, 131. assignments by business, 130. stock, 131. foreign, 133. banking associations, 133. moneyed, 133, 135. preferences by, 135, 136, 310, 311, 319. restrictions on, 135, 136. assignment does not dissolve, 126. insolvent, assignee of, 130, 135, 146. COSTS against assignee when assignment is set aside, 356. in actions by or against assignee, 470, 514, 556, 557. security for, by assignee, 471. collected in action against assignee belong to attorney, 556. COUNSEL fees, when direction to pay invalidates assignment, 159. COI'NTY COUET, jurisdiction of, under general assignment act, 391. in case of disability of county judge, 393. concurrent jurisdiction in equity, 395. CKEDIT, power of assignee to sell on, 257, 361. sales on, by assignee, 479. directions as to, 257. implied power to assignee to sell on, 258. CREDITORS, consent of, under " two-thirds act," 19, 28. general assignments directly to, 114. when parties to assignment, 134. assent of, to assignment, 114, 115, 116, 134, 313, 314. releases by assignment, exacting, 342. may be assignees, 146. actions by, against assignee, 500. in avoidance of assignment, 312. treating the assignment as a nullity, 337. who may assail assignment, 312, 316. assailing the assignment as fraudulent or void, 312. attacking assignment, share in, when unsuccessful, 316. not injured cannot attack assignment, 316. priority of, 340. payments to, by assignee, 349. GENERAL INDEX. 709 CREDITORS— continued. right of action to recover property fraudulently transferred, 447. rights of, as against unfiled chattel mortgages, 449. secured, payment of, 531, notice to present claims, 533, 538. proceedings by, for accounting, 540. who, barred by proceedings for accounting, 566. composition by portion of, 594. rights of as against foreign bankrupt assignment, 366. See FoREiGK Ceeditoes ; Peepekences. CEEDITOES' SUIT to set aside assignment. See Avoidance oe AssiaKMENT. CUSTODY of property by assignee, 437. of trust fund, 438. See PossEssioK, Taking of. CUSTOMS OFFICIALS, property fraudulently obtained in cus- tody of, replevin, 444. DAMAGES, right of action for, assignable, 175. DEATH of assignee, proceedings in case of, 515. of surviving trustee, 459. DEBTOR, right to assign, 116. DEBTS, to be paid, designation of, in assignment, 160. proof of, 521, 535. collection of, by assignee, 456, 457. what may not be secured by assignment, 301. fictitious and fraudulent, 215, 297. contingent, may be paid, 254. unliquidated and unaccrued, payment of, 535. due partners, payment of, 537. what may be preferred, 313. See Pkefeeences. what included in composition, 601. what may be discharged under "two-thirds act," 53. what not affected by discharge under "two-thirds act," 59. power of assignee to compound, 263. DECLARATION of trust in assignment, 158, 159. of assignor, when evidence against assignee, 301, 303, 463. DECREE in bill to set aside assignment, 357. on final accounting, 561. enforcement of, 577. 710 GENERAL INDEX. DEFENSE of suits, provision for, in assignment, 266. DEFENSES, in actions by assignee, 462. in action for accounting, 543. by assignee to collect estate, 462. in creditors' suits, 336. DEFINITION of voluntary assignment, 109, 110. of insolvency, 1. DELAY of creditors', 254, 268, 273. DELIVERY of assignment to assignee, 168. what amounts to, 168. of inventory, 406. of possession of property assigned, 291, 437. proof of, 103. security for, 103. of debts, 437. constructive, 294. retention of possession, 291, 434. DESCRIPTION of property in assignment, 155. of amount assigned, 155, 170. of debts to be paid, 160. DEVISEES, interest of, passes by assignment, 188. DIRECT assiguments to creditors, 114. DIRECTIONS to assignee must be followed, 117, 477. as to sales, fraud in, 255, 257. in assignment, 151. DISABILITY of assignee, 504-520. to purchase at sale by him, 485. how removed, 485. DISCHARGE of insolvent under "two-thirds act," 46. effect of, 51. what debts covered by, 52. of sureties, 55. of bail, 55. of joint debtors, 55. of judgments, 52, 56, 58. of liability of indorser or maker of note, 58. does not affect non-resident creditor, 64. of debts due United States, 66. how pleaded, 67, 68. debts due non-resident, 61. how available after judgment, 69. GENERAL INDEX. 711 BISGIiATlGr^— continued. impeaching, 69, 70, 74. plaintifE may discontiuue without costs after, 71. new promise after, 71. when Yoid, 72. omission of name of debtor from schedule defeats, 31. amendment of proceedings, 75. review of proceedings, 75. in proceedings for exemption from arrest, 82. of general assignee on final accounting, 583. of sureties, 583. by consent, 583. on proof of composition, 574. on removal of assignee, 514. of assignees under general assignment act, 579. See " Two-Thirds Act" ; " Foueteek Days Act." DISCOVERY, action for, may be maintained when, 330. of secreted property, premium for, 455. when assignor refuses to furnish inventory, 456. See Examination. DISPUTED CLAIMS, trial of, 472, 526, 527. DISSOLUTION of partnership, assignment by partner after, 231. of corporation, assignment by does not effect, 126. DISTRIBUTION by assignee among creditors, 521. ascertaining debts to be paid, 523. what creditors are entitled to, 522, 523. notice to present claims, 523. dividends on, 582. preferred debts, 209, 527. wages, 528. to secured creditors, 531. priority of United States on, 528. debts due partners, 537. interest on claims, how computed, 537. unliquidated and unaccrued claims, 535. judgments recovered after assignment, 534. payment, how made, 582. enforcement of decree for, 577. by statutory trustees, 584. DIVIDENDS to creditors, 582, 583. notice of, 583. 712 GENERAL INDEX. J)IVI'D:ENI>S— continued. action for, 500. payments, how made, 582. payment of, does not take debt out of statute of limita- tions, 583. DOMESTIC ASSIGNMENTS. See Foreigi^ and Domestic Assignments. DOMICILE of parties affected by assignments, 385. See Lex Loci ; Situs. DOWEE, wife's claim to, 187, 188. DUTIES of assignee, 430. in regard to sale, 477. care and custody of assigned property, 437. to keep accounts, 439. failure to prosecute action, 493. EFFECT, when assignment takes, 167. EMPLOYMENT of debtor by assignee, 441. of agents, 264, 440, 441. ENDORSEES, discharge of, 58. EQUITIES, assignee takes subject to, 430, 464. EVIDENCE of intent, 301. declarations of assignor as, 303, 463. of assignee as, 303. in actions by assignee to collect estate, 463. EXAMINATION of debtor and other witnesses under the general assignment act, 451. of insolvent debtor under the provisions of the Revised Statutes, 453. under " two-thirds act," 43. of non-resident wife, 43. of accounts, 551. EXCEPTION of property out of assignment, 170, 176. EXECUTION of general assignments, 150-169. statutory provisions, 150. provisions directory and mandatory, 151. form of assignment, 152, 153. contents, 154. consideration, 155. description of property assigned, 155. schedule, 157. GEKEEAL INDEX. 713 ^EXEGTJTIO'N— continued. trusts, declaration of, 158. to convert property into money, 158. to pay expenses of, 159. provisions respecting time for, 255. designation of debts to be paid, IGO. acceptance by assignee, 163. takes effect when, 167. by wife of assignor, 187. acknowledgment of, 163. BXECUTIOlSr CREDITORS, consent of, under "two-thirds act," 25. EXECUTIONS, intent to defeat, 276. when not essential in creditors' suit, 331. action in aid of, may be maintained when, 330. levy on assigned property, 309, 330, 334. See "PoTJETEBK' Days Act." EXECUTORS and administrators, consent of, under " two-thirds act," 30. EXEMPTION of insolvent from arrest and imprisonment, pro- ceedings for, 77 et seq. who may be exempted, 78. petition of debtor for, 78. schedule of debtor, 79. affidavit by debtor^ 79. notice to creditors, 80. order for assignment, 81. preferences in assignment debars insolvent from, 80. discharge, when granted, 83. recording of papers on discharge, 83. when defendant is to be released from custody, 83. debts not discharged, 84. discharge, when void, 84. of property by debtor, 190. of liability of assignee, in assignment, 365. EXEMPTIONS of property under "two-thirds act," 47. under proceedings for exemption from arrest, 81. in general assignment, 190. EXPENSES of executing the trust, under general assignment, 159, 554. allowance of, to voluntary assignee in bankruptcy, 310. 714 GENERAL INDEX. FAMILY of debtor, reservations for benefit of, 249, 250. FEES for filing papers, 395. FICTITIOUS debts, preference of, 215, 298. trust for payment of, 297. FILING and recording papers under assignment act, 395. failure to file inventory or bond, 399. FIXAL accounting by assignee, 539. discharge of assignee on, 583. FIXTURES, title of assignee to as against mortgagee, 183. FOEEIGX corporations, assignments by, 132. creditors may join in petition under "two-thirds act," 20. FOREIGX AND DOMESTIC ASSIGNMENTS, 364-390. in general, 364. bankrupt, 365. right of foreign bankrupt assignee to sue, 367. voluntary assignments, 368. of real estate, 369. of tangible personal property, 370. remedy governed by forum, 370. contravening law of the situs, 373, 374, 375. attachment proceedings, 374. manner of making assignments, 378. statute of fraudulent conveyances, 379. invalidity of, 381. repugnancy and nonconformity, distinction between, 381. rule as to preferences, 382. discrimination in favor of residents, 383. Illinois rule, 384. where parties are residents of State where assignment was made, 385. effect of assignee's possession, 386. injunction against resident creditor from proceeding in another jurisdiction, 387. choses in action, 388. ships at sea, 390. FOR^I of general assignment, 152, 153. of inventory, 404. of schedule, 404. of assignee's bond, 410. of account, 551. GENERAL INDEX. 715 FORMS in proceedings under the "two-thirds act.'" petition for discharge from debts, 637. consent of creditors, 638. affidavit of creditor, 639. schedule of creditors, 640. inrentory of property annexed, 640. petitioner's affidavit, 641. affidavit of names and residence of creditors, 642. order to show cause, 641. affidavit of service of order to show cause, 643. affidavit of publication of order to show cause, 643. specification of objections and demand for a jury, 643. order for trial by jury, 644. order for assignment, 644. assignment, 645. trustee's certificate, 646. clerk's certificate of recording assignment, 647. discharge, 648. in proceedings for exemption of insolvent from arrest. petition of insolvent, 648. schedule and inventory, 649. petitioner's affidavit, 649. order to show cause, 649. order for assignment, 650. assignment, 650. discharge, 651. of proceedings under the "fourteen days act." petition for discharge from imprisonment on execution, 653. schedule, 654. affidavit to be annexed to petition, 654. notice to creditors, 654. order to bring prisoner before the court, 655, order directing an assignment, 655. discharge, 656. of general assignments and proceedings thereunder. assignment by individual without preferences, 658. copartnership assignment without preference, 660. 716 GENERAL INDEX. FORMS — continued. shorter form, 664. assigmnent with preference, 667. title to inventory, 668. inventory and schedule, 669. affidavit to inventory and schedule, 672. assignee's bond, 672. petition for leave to file provisional bond, 674. order on the same, 675. petition extending time to file inventory and schedule, 675. order on same, 676. petition of assignee for examination of assignor or third person to enable him to prepare inventory and sched- ules, 676. order for examination of assignor or third person, 677. affidavit to obtain order authorizing assignee to advertise for claims, 678. order for publication of notice to creditors, 679. notice to creditors, 679. proof of debt, 680. petition for leave to compromise a debt due the estate, 680. order on the same, 681. petition by assignee for a citation for a final accounting, 681. order for citation, 683. citation for accounting, 683. order of reference, 684. referee's report on accounting, 685. final decree, 688. composition deed, 690. " FOURTEEN DAYS ACT," who may apply for discharge under, 86. petition for, 88, 89. notice, how served, 93, 94. where State is creditor, 94. petition by debtor, form of, 90. schedule by debtor, 90. affidavit by petitioner, 92. proceedings on return of petition, 95. " just and fair" proceedings, when, 95, objections, 98, 99. GENERAL INDEX. 717 "FOURTEElSr DAYS ACT!"— continued. adjournment of proceedings, 101. assignment by debtor, 102. discharge, when granted, 102. proof of delivery of property to assignee, 103. security for the delivery of property, 103. discharge of debtor, 103. form of, 103. debtor's property still liable for debt, 104. when liable to re-arrest, 104. trustees, their rights and duties, 104. debtor may be required to apply for discharge, 105. effect of omission to apply, 105. review of proceedings on, 106. assignments fraudulent as against proceedings under, 311. FEAUD in selecting assignee, 147. repelling presumptions of, by parol evidence, 339. property obtained by, recovery of, by replevin, 442. when in custody of customs officials, 444. on part of debtor prevents discharge under " fourteen days act," 99. continued possession as evidence of, 293. FRAUD ON THE FACE OF THE ASSIGNMENT, 234-267. statutory provisions, 234. assignments, how construed, 235. void in part., good in part, 239. good as between parties, 241. assignments exacting releases, 242. assignments preferring creditors who have agreed to exe- cute releases, 244. preferences conditional upon other acts of creditors, 246. reservations of property, 248. of benefit out of assigned property, 248. resulting trust to assignor, 250. reservation of powers to assignor, 250. provisions for continuing assignor's business, 251. power to defend suits and pay costs, 266. to lease or mortgage, 267. in providing for future liabilities, 252. in giving preferences in general assignment, 216. by secret agreement, 218. 718 GENERAL INDEX. FRAUD — continued. on the face of assignment, 234. in law and in fact, 337. indicia of, 242. in creating trusts for the assignor, 24'?'. in securing contingent liabilities, 254. by provisions tending to delay, 254, 268. in directions as to time of sale, 355. as to the mode of sale, 257. as to sales on credit, 257. in reserving power to declare further preferences, 260. by provisions for compounding with creditors, 262. for compounding debts due assignor, 262. for payment of taxes, insurance and rent, 263. for employing agents, attorneys, etc., 264. exempting assignee from liabilities, 265. for defending suits and paying costs, 266. for leasing or mortgaging the assigned property, 267. FRAUD FROM EXTRINSIC CIRCUMSTAJSTOES, 268-311. in general, 268. fraudulent intent on part of assignor defeats assignment, 268. must be at time of making assignment, 270. incidental delay, 373. intent to effect settlement, 274. solvency of assignor, 275. intent to defeat execution and prevent sacrifice of property, 376. threats to make assignment, 277. promises not to make assignment, 277. contemporaneous acts, 378. fraudulent scheme, 278. representations, 383. obtaining property in contemplation of assignment, 283. withdrawal of assets, 285. omissions of property from schedule, 287. subsequent acts of assignor, 289. of assignee, 295. delivery of possession, 291. change of possession of real property, 295. fictitious and fraudulent debts, 297. GENERAL INBEX. 719 FKAUD — continued. evidence of intent, 301. declarations of assignor and assignee as evidence to im- peach assignment, 303. when assignment fraudulent in bankruptcy, 307. levy after assignment and before bankruptcy, 309. protection of State assignee in bankruptcy, 310. assignments fraudulent as against proceedings under non- imprisonment act, 311. FRAUDULENT and void assignment, 234-311. See Fraud ; Iktent. void in part and good in part, 239. good as between the parties, 241. as ground for arrest, 324. threats to make assignment, 277. promises not to make assignment, 277. in bankruptcy, when, 307. good as to creditors who assent, 313. as to creditors who are not injured, 316. proceedings by creditors to avoid, 313. relief against, 357. preferences, 215, 216, 298. assailing assignment as, 312. See AvoiDAKCB of Assignment. FRAUDULENT CONVEYANCE, right of assignee to set aside, 175, 445. statute of, 235, 356, 379. FRAUDULENT INTENT, of assignor, 317. defeats assignment, 268, 270. is a question of fact, 237, 238. makes assignment void, 238. inferred from acts which hinder and delay creditors, 239. assignment to non-resident not proof of, 148. See Fkaud. FRAUDULENT REPRESENTATIONS, 278. of debtor vitiate composition, 599. FRAUDULENT SCHEME, 283. FRAUDULENT TRANSFERS of property, 175, 445, 447. assignee's right of action, 445. creditor's right of action, 447. actions attacking assignment, 450. when conveyance is, in bankruptcy, 307. 720 GENERAL INDEX. FEAUDULENT T'RANSF:ERS— continued. assignee liable for neglect to assail, 447, 458. FUTUEE liabilities, proyision for, fraudulent, 352, 537. GENEEAL ASSIGNMENTS for the benefit of creditors, 109-390. text of act of 1877, 617. distinguished from assignment under insolvent laws, 12, 109, 110. distinguished from deeds of agency and powers of attorney, 111, 115. must include all the debtor's property. 111. assignments of a part of property, 170. for the benefit of part of the creditors, 172. a trust to sell for creditors essential, 112. assent of creditors not essential, 115. distinguished from mortgages, 113. directly to creditors, 104. right to make, 116. effect of, 117. New York State legislation, 118-120. act of 1860, 118. amendments to, 119. act of 1877, 120. parties to, 123. by whom made, 133. by corporations. See Corporations. by non-residents, 124. by banking associations, 133. by moneyed corporations, 133. by partners of partnership property, 136, 220. of individual interest, 141. after dissolution, 141, 231. by surviving partners, 142. by limited partnership, 144. to whom made, 146. mode of executing, 150. form of, 152. contents of, 154. consideration of, 154. description of assigned property, 155. GENEEAL INDEX. 721 GENEEAL ASSIGNMENTS— cowifraMeiZ. schedule, 157. amendments to, 360. declaration of trusts in, 158, 159. acknowledgment of, 163. recording of, 166. when it takes effect, 167. of a part of debtor's property, 191. for the benefit of part of the creditors, 172. what passes under, 175-191. preferences in, 193-319. See Preferences. construction of, 335, 236, 337. validity of, how tested, 334. must be executed according to law, 234. is a deed of trust, 313. fraud on the face of, 334^367. See Fraud. from extrinsic circumstances, 268-311. See Fraud. proceedings to avoid, 312-358. See Ayoidancb. amendment, reformation and revocation of, 360 et seq. foreign and domestic, .S64 et seq. when fraudulent in bankruptcy, 307. notice of, 533. removal of assignee, 513. acceptance of. See Acceptance. parties to, 133-149. See Parties. making of, 150-169. See Execution. property assigned, 170-191. See Property. preferences in, 193-219. See Preferences. appropriation of property in, by firms and their members, 220-233. See Partnerships. 46 722 GENERAL INDEX. GENEEAL ASSIG'NMH^TS— continued. from extrinsic circumstances, ::i68-311. See Fraud. proceedings to avoid, 312-360. See Ceeditoes' Suits. amendment, reformation and revocation of, 360-363. foreign and domestic, 364-390. GOOD FAITH, presumption of, 236. HINDER AND DELAY. See Delay. ILLEGAL preferences, 216. IMPEACHING discharge, 69, 70, 74. IMPLIED power to sell on credit, 258. , trusts in assignment, 158, 477. IMPRISONED DEBTOR, to be released after discharge, 67. proceedings for discharge from imprisonment on execu- tion, 85. See "Fourteen Days Act." INCIDENTAL delay, 273. INCOMPETENCY of assignee, 512. INDICIA or badges of fraud, 242. INDOESERS may be secured by assignment, 254. preferred by assignment, 215. INFANTS, assignments by, void, 123. INJUNCTION in creditors' suit, 337. against resident creditor of foreign debtor, 387. INSOLVENCY. See General Assignments for Creditors. definition of, 1. what is proof of, 3, note. bankruptcy distinguished from, 4. English legislation, 5. legislation in New York State, 7. right of state to legislate in reference to, 9. when state laws impair obligation of contract, 11. on the part of an assignor, 275. on the part of assignee, 149. when ground for removal of assignee, 512. INSOLVENT CORPORATION, assignee of, 130, 135, 146. INSOLVENT LAWS. See Insolvency. GENERAL INDEX. 733 INSPECTION" of assignor's books, 338. INSUEANCE, power of assignee to effect, 263, 437. INSTRUCTIONS, application to court by assignee for, 425. INTANGIBLE property, care and custody of, 437. INTENT of assignor, 234, 235, 236. See Ekaudulent Intent. INTEREST on claims of creditors, 537. on preferred claims, 537. when assignee chargeable with, 498. INTERESTS in wife's property pass by assignment, when, 187. of devisees pass by assignment, 188. INTERSTATE comity, rule of, 364. INVENTORY of insolvent under "two-thirds act," 29. in proceedings for exemption from arrest, 79. under the " fourteen days act," 90. under the " general assignment act," 397, 398. effect of failure to file, 399. is part of the assignment, 399. form of, 404. verification of, 405. delivery of, 406. preparation and filing of, by assignee, 406. extension of time to file, 407. amendment of, 407. by assignee of property assigned, 435. refusal of assignor to furnish, 456. See Schedule. JOINT assignees must all act, 149, 432. acceptance of assignment by one, 163. refusal of one vests whole estate in others, 432. assignment operative only as to those assenting, 163. in general assignment, 149. where one incompetent others cannot act, 432. death of one vests trust estate in survivors, 433, 504. liability of, 501. survivorship, 504. debtor, effect of consent where petitioner under " two- thirds act" is, 21. discharge of, 56. trustees, 433. See Tkustees. 724: GENERAL INDEX. JUDGMENT, discharge of under "two-thirds act," 53, 56, 58. discharge, how available after, 69. assignment of, 186. when not essential in creditors' suit, 331. obtained after filing of petition under " two-thirds act" not a new debt, 56. in creditors' suit, 357. enforcement of, 358. recovered after assignment, 534. on final accounting, 561. creditors, actions by, 445, 446. JURISDICTION of county court and court of common pleas, 391-396. in general, 391. of county court, 391. concurrent jurisdiction of supreme court, 393. disability of county judge, 393. of court of common pleas, 394. concurrent jurisdiction in equity, 395. filing and recording papers, 395. fees, 395. on accounting, 539. of county court, 570. LANDS, conveyance of, by assignment, 187. LAPSE of time, when trust closed by, 545, 581. LEASE, power of assignee to, 267. LEASEHOLD interests, when they pass, 189. premises, assignee taking possession of, I8(t LEGISLATION on insolvency, English, 5. New York State, 7, 118, 130. right of state to legislate, 9. LEX FO m goYema remedy, 371. LUX LOCI of assignment, 364. the general rule, 369. as to real property, 369. as to choses in action, 388. rule of comity, 364. LIABILITY of assignees, 488-503. in general, 488. extent of, 489. GENERAL INDEX. 725 LIABILITY— continued. for breach of trust, 490. remedy against, 500. for seryices, 492. for rent, 493. for failure to prosecute action, 493. for interest, 498. stipulations respecting, 265. exemption of, 265. for neglect to assail fraudulent transfer, 447, 458. of sureties on assignee's bond, 413. for negligence, 490. for mistakes, 490, 491. how avoided by application to the court, 426. of co-assignees, 501. of sureties on assignee's bond, 413. suits by creditor against assignee, 500. when protected, 310, 348-353, 501. See Con-TiNGESTT Liabilities ; Fitturb Liabilities. LIENS, assignee takes subject to, 348, 421-423. paid by assignee, 348. LIMITATIONS, statute of, payment of dividends does not take debt out of, 583. application of to trust, 544. LIMITED partnership, assignment by, 144. cannot give preferences, 144. LI8 PENDENS, creditors' suits, 340. MANDATOKY provisions in general assignment, 151. MECHANIC'S LIEN on assigned property, 423. See Liens. MISCONDUCT of assignee, proceeding in case of, 509. MISTAKE, liability of assignee for, 490, 491. of assignee, payments made by, 393. MODE of sale, directions as to, 357. MONEY in bank passes by assignment, 182. MONEYED corporations, assignments by, 133, 135. MORTGAGE, power of assignee to, 267. to pay off, 437. to pay interest, 437. distinguished from assignment, 113. 726 GENERAL INDEX. ISTBG-LECT to prosecute action, liability of assignee for, 493. NEGLIGENCE, liability of assignee for, 490. NEW PEOMISE after discharge under the "two-thirds act," 71. after discharge by composition, 613. NON-DELIVEKY of possession of assigned property, 291, 436. when only presumptive evidence of fraud, 293. NON-EESIDENCE will not disqualify assignee, 612. N0N-EE8IDENT wife of debtor, examination of, 42. debts due not discharged, 61, 63, 64. assignments by, 124. right of foreign bankrupt to sue, 367. assignment to, not proof of fraudulent intent, 148. assignee not disqualified, 512. NON-RESIDENTS. See Foreign Creditors. creditors to annex accounts to consent under " two-thirds act," 28. discriminations against, 383-385. NOTES, discharge of makers and indorsers, 58. NOTICE to creditors under "two-thirds act," 34. jurisdictional, 36. personal or by mail, 36. publication of, 36. proof of, 38. in proceedings for exemption from arrest, 80. under " fourteen days act," 93, 94. to present claims under general assignment, 523. by trustee, 538. on accounting, 547. of sale, 482. of assignment of claims, 438. of hearing in reference for accounting, 546. OATH of assignee of insolvent debtors, 416. OBJECTIONS to account, 552. OBLIGATION of the contract, when State insolvent laws impair, 11, 59. OEDEE of payment by assignee, 521, 582. PAEOL evidence to repel presumption of fraud, 339. PAETIAL assignment, what is, 191. not within priority acts of Congress, 529. GENERAL INDEX. 727 PAETIAL — continued. with preferences, 170, 216. accountings, 563. PARTIES to general assignments, 123-149. by whom assignments made, 123. non-residents, 124. corporations, 125. statutory restrictions on, 127. business corporations, 130. present state of the authorities, 131. foreign corporations, 132. banking associations, 132. moneyed corporations, 133. preferential assignments by corporations, 135, 136, 210, 211. by partners of partnership property, 136. by one partner, express authority, 138. by partner of his interest, 141. by jtartners after dissolution, 141. by surviving partner, 142. by surviving partner, of partnership real estate, 142. by limited partnership, 144. to whom assignment may be made, 146. selection and qualification of assignee, 147. joint assignees, 149. to action by assignee, 458. for accounting, 541. in creditor's suit, 333. by assignee to collect estate, 458. for accounting, 541. PAETNERS, assignments by, 136. of partnership property, 136, 141, 220. by one partner, express authority, 138. of his interest, 141. after dissolution, 141, 231. by surviving partner, 142. by limited partnership, 144. appropriation of assets in assignments by, 220. provision for payment of individual debts, 222. of partnership debts from individual property, 226. of individual debts from joint fund, 228. 728 GENERAL INDEX. TART'N'ERS— continued. provisions for payment of debt due a partner, 229. power of each of several, to assign his interest, 123. preferences by, 221. payment by assignee of debts due, 537. power of, to compound, 594. attachable interests of, in firm assets, 3, note. acknowledgment of assignment by, 165. See Paetneeships. PAETNEESHIPS, assignments by, 220-233. when firm and individual property included, 320. firm equitably liable for individual debts, 225. when void, 362, 363. consent of, as creditors under " two-thirds act," 21. limited, cannot give preferences, 144. assignments by, 144. appropriation of assets in assignments by, 220. preference of individual creditors in assignments, 221. preference of firm creditors in assignments, 226. PAYMENT, preference by, 193. by assignee, order of, 521, 582. PEEJURY, penalty for, under "two-thirds act," 25. PERSONAL uses, statute of, 235. property, description of, in assignment, 155. priority of creditors as to, 344. tangible, assignments of, 370. PETITION for discharge under "two-thirds act," 17. "fourteen days act," 86, 95. ' POSSESSION of property assigned, delivery of, 291, 437. of real property, change of, 295. want of, when evidence of fraud, 293. actual and continued change of, 437. how taken when property is not in assignee's hands, 437. of leasehold premises, 440. by foreign assignee, effect of, 386. continued, as evidence of fraud, 293. taking of, and custody of property, 435-455. in general, 435. manner of taking, 435. delivery of. See Delivery. GENERAL INDEX. 729 POSSESSlOl^— continued. continued change of, 435. custody of, 437. care of intangible property, 437. of trust funds, 438. accounts, duty to keep, 439. right to reject property, 439. agents, employment of, 440. employment of assignors as, 441. replevin, property fraudulently obtained by assignor, 442. when goods in custody of customs officials, 444. remedy of vendor in equity, 444. property fraudulently transferred by assignor, 445, 447. ' assignee's right of action, 445. creditor's right of action, 447. actions where assignment attacked, 450. unfiled chattel mortgages, title of assignee as against, 447. rights of creditors, 449. examination of debtor and witnesses, 451, 453. production of books and papers, 451. secreted property, premium for discovering, 455. POWEK of partners to assign, 136. of attorney not an assignment, 111. to sell on credit, when it vitiates an assignment, 257. implied power, 258. of revocation void, 363. POWERS to assignee, special in assignments, 263. to lease or mortgage, 267. to effect insurance, 263. to pay taxes and rent, 263. to appoint agents, 264, 440, 441. to declare future preferences, 260. to compound with creditors, 262. to defend suits, 266. to assignee to sell at public or private sale, 257, 482. to sell for cash or upon credit, 257. to change order of preferences, void, 261. to name successor of assignee, void, 147. of assignee under assignment, 416-434. See Assignees. to sell property, 477. 730 GENERAL INDEX. POWERS— continued. of supreme court, act of 1885, 637. of county court on accounting, 570. PKEPEEENOES, 192-219. of creditors, right of, 192. by payment, 192. regarded with disfavor, 194. right to prefer, 194. restrictions on, 201, 219. of wages by statute, 197. limited to one-third of assets, 200. excessive, do not invalidate assignment, 203. void in whole or in part, 208. contemporaneous with assignment, 203. knowledge of creditor preferred, 205. manner of distribution under statute, 209. by corporations, 135, 136, 210, 211. judgments sufEered, 211. restrictions on, 125, 136. agreement to give, 213, what debts may be preferred, 213. by partners to creditors of individual partners, 222. by individual partners to creditors of firm, 226. assignment giving, must be absolute, 216. upon conditions, 246. must.be declared in the assignment itself, 216. secret, 218. payment of, by assignee, 527, 528. debars the debtor from discharge under the "two-thirds act," 44. debars discharge in proceedings for exemption from arrest, 80. future, reserving power to declare, 260. of releasing creditors, 244. conditional on other acts of creditors, 246. rule as to, in foreign assignments, 382-385. of wife, 213. of fictitious debts, 215, 298. interest on preferred claims, 537. debar debtor from discharge under " two-thirds act," 44. in assignment by partnership, when void, 362. See Conditional Peefekenoes. GENERAL INDEX. 731 PREFEREED DEBTS, payment of, 527. PREMIUM for discovering secreted property of insolvent debtor, 455. PRESUMPTION of assent of creditors to assignment, 115, 124. of fraud, repelling, by parol evidence, 339. PREVIOUS assignment, property transferred by, does not pass, 180. PRIORITY of creditors in creditor's suits, 340. as to real estate, 341. as to personal property, 344. of United States, 528. PROCEEDINGrS of insolvent debtors to obtain discharge from their debts. See " Two-Thirds Act." ■ of creditors to avoid assignment, 312-358. See Avoidance ob Assigkmbnt. PRODUCTIOJST of books and papers. See Books. PROMISES not to make assignment, 277. nevir, after discharge in composition, 613. PEOOE of insolvency, 3, note. of delivery of assigned property, 103. of debts under assignment, 521, 523, 526. of claims on accounting, 573. PROPERTY assigned, 170-191. general assignments, 170. assignment of part of property, 170. for benefit of part of creditors, 172. what may be assigned, 173. rights subsequently accruing, 181. money in bank, 182. property in transit, 182. trade-marks, 183. fixtures, 183. consigned goods, 183, 1 84. stocks held on margin, 185. judgments, 186. claims against the United States, 186. real property, 187. wife's dower and separate property, 187. interests of devisees, 188. leasehold property, 189. 732 GENERAL INDEX. PnOF^WTY—contimied. exemptions, 190. payments made by assignee in preserving, 351. amount of, 170. description of, 155. delivery of possession, 291. when all the debtor's, must be assigned, 170. what passes under general terms, 155. taking possession of, by assignee, 435. custody of, 437. care of, 487. assignee's right to reject, 439. fraudulently obtained by assignor, 443. transferred by assignor, 175, 445. by previous assignment, 180. provisions for leasing or mortgaging, 267. reservations of benefit out of, 248. omissions of, from schedule, 287. obtaining, in contemplation of insolvency, 283. custody of. See Possession. collecting. See Collecting Estate. sale of. See Sale of Assigned Pkopertv. claims against. See Claims. accounting. See Accounting. termination of trust. See Tkcst. inventory by assignee, 435. PEOSECUTION of assignee's bond, 415. PEOTECTION" of assignee, 310, 348-353, 501. of purchaser without notice, 356. PKOVISIONAL bond of assignee, 412. PUECHASEE at assignee's sale, title of, 354. assignee cannot be, 483, 485. title of, 354. without notice, protection of, 356. assignee not a bona fide, 422. GENERAL INDEX. 733 QUALIFICATIONS of assignee, 146, 147. EEAL ESTATE of partners, how assigned, 140. subject of assignment, 187. how described in assignment, 155. change of possession, 295. does not pass by foreign assignment, 369. appraisal of, by assignee, 405. priority of creditors as to, 341. conveyance of, by assignee, 486. EE-ASSIGNMENT to assignor by assignee, 361. KECEIVEES, appointment of, 513. in action to set aside assignment, 541. may join in petition under "two-thirds act," 20. in creditors' suits, 336. EEOITAL of assignment, 154. EECOEDING of assignment, 16G. of papers, 395. fees, 395. EEPEEEB, report of, 559, 576. in proceedings to set aside assignment, 358. EEFEEENCB as to disputed claims, 472. order of, on accounting, 545, -572. notice of hearing on, 546. notice to creditors to present claims on, 547, 573. proceedings on, 548, 572. EEFOEMATION of assignments, 363. EELATIONSHIP between assignor and assignee, 147. EELEASE, stipulation for, in assignment, 242. assignments preferring creditors who have released, 244. EEMOVAL of assignee for misconduct, 506, 509. appointment of receiver on, 512. under general assignment act, 513. practice on, 515. of trustees of insolvent debtor, 517. EENT of premises, liability of assignee for, 493. payment of, 263. accruing, not included in liabilities, 161, 536. EENUNCIATION of assignment by assignee, 506, 508. after acceptance, 507. of trustees, 517. 734 GENERAL INDEX. EEPLBYIN of property fraudulently obtained by assignor, 442. when in custody of customs officials, 444. REPUGNANCY in foreign assignments, 381. RE-SALE. See Sale. RESERVATIONS in assignments for the benefit of the assignor, 348. or exceptions of property, 246. of surplus to assignor, 2.50. of powers to assignor, 250. against sureties in compositions, 603. RESIGNATION of assignee, proceedings in case of, 506. RESTRICTIONS on the right to prefer, 201, 219. RESULTING trusts for debtor, 250. RETAIL, sales at, by assignee, 479. RETENTION of possession evidence of fraud, 291. REVOCATION of assignments, 363. RIGHT to assign property, 116. to prefer creditors, 192. restriction on, 201, 219. of corporation to assign, 125. restrictions on, 127. RIGHTS of assignee, 420, 430. how the assignee takes, 421. subsequently accruing, when not assignable, 181. of assignor which assignee cannot enforce, 430. RULES OF THE COURT OE COMMON PLEAS relating to as- signments, 628. SALARIES. See Wages. SALE of assigned property, 477-487. by assignee, 477. power of, 477. duties in regard to, 478. time of, 478. terms of, 478, 479. provision for, in assignment, 265, 257. mode of, 257, 478. at retail, continuing assignor's business, 479. on credit, 257, 261, 479. at auction, 482. notice of, 482. GENERAL INDEX. 735 SALE — continued. disability of assignee to purchase at, 483. how removed, 485. improper, liability of assignee for, 486, 490. conveyance by assignee, 486. by attorney, 486. re-sale, 487. title of purchaser, 354. of uncoUectable claims, 485. in contravention of the trust, 486. statutory trustees, right to sue, 487. penalty for concealing property from, 487. SALES, directions as to time of, 255. as to mode of, 257. SCHEDULE by petitioner under "two-thirds act," 29. omission of name of creditor defeats discharge, 31. by debtor under "fourteen days act," 90. omissions of property from, 287. preparation and filing of, by assignee, 406. of property in reference to assignment, 156, 157. qualifies general description, 156. of debts to be paid, 160. which are not required by statute, 400. See Intbntoet. SECEET preferences, 218. stipulations in composition, 606. effect of on claims, 610. , SECEETED property, premium for discovering, 455. SECUEED creditors, payment of, 531. debts may be provided for by assignment, 215. SECUEITY for costs in action by assignee to collect estate, 471. for undue advantage to creditor, void, 611. SEEVIOE of citation for accounting, 567, 568. SET-OFF, assignee takes subject to, 464. in case of assignee of insolvent debtor under Eevised Stat- utes, 474. SETTING- aside assignment as fraudulent or void, 312. SETTLEMENT, intent to effect, 274. SEVEEAL instruments, assignments by, 152. SHIPS at sea. See Vessels. 736 GENERAL INDEX. SITUS, law of the, assignments contrayening, 373. attachment proceedings, 374. manner of making, 378. statutes of fraudulent conveyances, 379. SOLVENCY of assignor, 375. STATE, debts due, not discharged, 66. taxes not preferred, 529. STATUTE of frauds, 335. of limitations, payment of dividend does not take debt out of, 582. of personal uses, 235. STATUTES, of fraudulent conveyances, 335, 356, 379. against preferences, 319. STIPULATIONS, in assignments for release of debtor, 343. for use of property, 348. for continuance of assignor's business, 251. for benefit of assignees, 265. limiting assignee's responsibility, 365. STOCK corporations, execution of general assignments by, 131. STOCKS held on margin, title to, 185, STOPPAGE in transitu against insolvent, 3. after assignment, 433. SUPPLEMENTAEY proceedings, 328. discharge under " two-thirds act" as a defense to, 71. SUPEEME COUET, concurrent jurisdiction of, 393, 637. SUEETIES may be secured by assignment, 354. may be preferred, 315. liability of, on assignee's bond, 413. discharge of, 55, 414, 583. reservations against, in composition, 603. allowance to assignee for money paid to, 408. 8UEPLUS, reservations of, to assignor, 350. SUEVIVING partner's right to assign, 143. trustee, on death of, trust vests in Supreme Court, 459. SUEVIVOESHIP among assignees, 504. TAKING- possession of property assigned, 435. TAXES, provision for payment of, 363. state, not preferred, 529. TEEMIMATION of trust. See Teust. THEEATS to make assignment, 277. GENERAL INDEX. 737 TIME for executing trust, provisions respecting, 255. to file inventory and bond, extension of, 407. of sale, 478. directions as to, 255. when creditor's right to sue in avoidance attaches, 346. TITLE of purchaser at assignee's sale, 354. TOETS, rights of action for, when assignable, 174. TEADE-MAEKS pass by assignment, 183. TEANSFEE, clause of, in assignments, 155. TEUST to convert property into money, 158. when deemed closed by lapse of time, 544, 581. when determined by acts of parties, 583. payments made by assignee in defending, 351. assignment must provide for payment of expenses of, 159. property held in, not assignable, 178. funds, custody and care of, 438. sales in contravention of, 486. breach of, by assignee, 486, 490, 500. termination of, 581-587. dividend, payment of, statute of limitations, 583. payments, how made, 582. discharge of assignees by consent, 583. and sureties on final accounting, 583. statutory trustees, distribution by, 584. TEUSTEES of insolvent debtors under Eevised Statutes, powers and authorities of, 416. oath by, 416. when vested with the estate of the debtor, 417. power to sue, 417. set-ofE against, 474. to sell at auction on notice, 418. to allow credits on sale of real property, 418. to execute conveyances, 419. to redeem property from incumbrances, 419. to settle account between debtor and his creditors, 419. to examine parties in reference to accounts, 419. to compound debts due the estate, 419. joint, who must act, 433. survivor of, 433. may examine debtor and other persons, 453. proceedings for such examination, 453. 47 738 GENERAL INDEX. TUVSTEES— continued. references by, on disputed claims, 473, 474. may sue to recover property, 487. penalty for concealing property from, 487. to convert the assigned property into money, 158. to pay expenses, 159. compensation of, 159. to pay debts, 159. death of, 506. surviving, death of, 459. removal of, 517. renunciation of, 517. on removal from State, 516. notice by, to present claims, 538. accounting by, 579. distribution by, 584. may petition under "two-thirds act," 21. "^ under " two-thirds act," how chosen, 47. TRUSTS, declaration of, 158, 159. for assignor, void, 347. " TWO-THIEDS ACT," authority of officer under, strictly con- strued, 15. who may be discharged, 16. application for discharge, 17. the petition, 17. contents of petition, 17. consent of creditors, 19. foreign creditors, 30. executors and administrators may petition, 20. copartnership creditors, how to join in petition, 30, 31. joint debtor, 31. trustees, receivers and assignees may petition, 21. corporations as petitioning creditors, 21. non-resident creditors, 28. creditors holding assigned claims, how to join in the peti- tion, 33. secured creditors, how to join in petition, 33. execution creditors, how to join in petition, 25. affidavits of consenting creditors, 25. schedule by petitioner, 39. penalty for false swearing, 25. GENERAL INDEX. 739 " TWO-THIRDS ACT "—continued. courts to which applications are to be made, 17. petitioner's affidavit, 33. order to show cause, 34. how order published and served, 34. order to be published, when, 35. time of publication, 35. mode of publication, 36. to be served personally or by mail, 36. on return of order, 37. preliminary proofs, 38. trial where discharge is opposed, 39. filing specifications, 39. grounds of opposition, 40. opposing creditor, when to file proof, 41. jury, demand of, and proceeding thereon, 38. proceedings, when they disagree, 43. examination of non-resident wife of debtor, 43. of insolvent, i'6. payments or transfers made after filing petition, 44. preferences debar the debtor frora discharge, 44. assignment of debtor's property, when directed, 46. to whom made, 46. trustees, how chosen, 47. what passes by assignment, 48. discharge of debtor, when to be granted, 48. what prevents, 43. proceedings when assignee refuses to sign certificate, 49. recording papers on discharge, 50. form of, 50. effect of, 51. when void, 73. what debts may be discharged, 53. of sureties, 55. of bail, 55. of joint debtors, 56. of judgments, 53, 56, 58. of liabilities of maker or indorser of note, 58. debts not affected by, 59. 740 GENERAL INDEX. " TWO-THIRDS ACT "—continued. constitutionality of law, 59. debts due non-residents not discharged, 61. modes to be performed without the State, 63. when creditor is not a resident, 64. creditors who appear and consent, 65. due United States, 66. State of New York, 66. insolvent to be released from imprisonment, 67. discharge, how pleaded, 67, 68. when a bar, 69 when it must be pleaded, 67. manner of pleading, 68. how available after judgment, 69. impeaching, in an action, 69. on motion, 70, 74. as defense to supplementary proceedings, 71. plaintiff may discontinue without costs when the defendant is discharged, 71. new promise after discharge, 71. when void, 72. amendment of proceedings, 75. review of proceedings, 75. UNITED STATES, debts due, not discharged under " two-thirds act," 66. priority of, 528. claims against, pass to assignee, 186. UNLIQUIDATED CLAIMS, payment of, 535. USURIOUS CLAIMS, assignments for payment of, .301. VALID, assignments in part, 239. VALIDITY of assignments, how tested, 234. VENDORS, remedy of, in equity. 444 VESSELS at sea, pass by foreign assignment, 390. VOID in part and valid in part, 239. assent of creditors, 125. in whole or in part, excessive preferences, 208. and voidable assignments, distinction between, 317. VOUCHERS of assignee on accounting, 553. VOLUNTARY assignments, 368. GENERAL INDEX. 741 WAGES to be i^refeiTed in assignment, 197, 528. AVIFE, dower and separate property of, 187, 188. non-resident, examination of, 42. preference of, in assignment, 213. WITHDRAWAL of assets, 285. WRITINfx, when necessary to an assignment, 152. (VVbole number ot pagiea 781.) .»: