1 E.D. Smith 566 | New York Court of Common Pleas | 1852
The action in its present shape cannot be maintained. The plaintiff charges, that the defendant is the assignee of the trustees of the third congregation of the Associate Reformed Church in the city of New York, under an assignment made to him by said trustees, for the benefit of certain creditors. That the pastor of said church, Rev. William R. Chapman, was one of the preferred creditors in the assignment, to $461, with interest, and entitled to be paid first in order. And that Chapman has assigned all his claim and interest therein to him, the plaintiff. He further charges, that the defendant took possession of the assigned property, and sold it for $1,200, upon a long credit for more than a year, to an irresponsible individual or individuals, taking therefor the personal contract, promissory notes, or obligations of such person or persons; that their irresponsibility was well and generally known at the time of such sale, and might have been ascertained upon proper inquiry and examination on the part of the defendant. That the terms of the sale were unreasonable, and improper for the defendant to enter into, as such assignee, and that he did not exercise that prudence and caution in making the sale, and in obtaining security for the punctual payment of the purchase money, which it was his duty to use. He further charges, that the defendant pretends that he took a chattel mortgage as security for the payment of the purchase money; and that although the purchase money has been due over two years, and the mortgage forfeited, yet, by the neglect, inattention or carelessness of the defendant, or of
The defendant set up in his answer that a portion of the assigned property was sold by him, and that he paid the proceeds to the preferred creditors pro rata. That he paid Chapman upon his claim $450, being about one half of his alleged indebtedness. That the remainder of the assigned property was sold by him, and a mortgage taken as a security for the purchase money, with the consent of Chapman. That one Davies claimed title to the property so mortgaged, and that the mortgagor refused to pay the purchase money until the title to the property could be finally settled and determined. That he caused a suit to be commenced to recover the property, and that the matter was submitted, by the consent of the defendant and the said Davies, to arbitration, to decide as to the rights of the parties ; and he denies that he made the sale to irresponsible persons; but avers that the mortgage is a valid, subsisting and adequate security of the debt; and he denies, generally, any neglect or mismanagement on his part. The reply denies specially the matter set up in the answer, and alleges that the arbitrators were never called upon to act. Upon this issue, such as it was, the parties went to trial before the referee, and he found, upon the evidence produced before him, that the amount due to Chapman was $891 50. That the de
The whole frame of this action is misconceived, and this report must be set aside. It is in the nature of an action at law to recover from an assignee of property, assigned for the benefit of creditors, a debt due to one of the creditors, upon the ground that the assignee has neglected to collect an amount due upon the sale of the assigned property, and apply it to the payment of the creditor in discharge of the trust. No such action could have been maintained before the code ; (Allen v. Imlot and Nichols, Holt, 641 ; Case v. Roberts, id. 500 ; Edwards v. Bate, 13 ; Law Journal, N. S. 156 ; Hill on Trustees, 518 ;) nor can it now. The remedy would have been in equity. Where it appeared that the assignee neglected to collect the debts after they were due and payable, or in any other respect was guilty of a breach of trust, the court of chancery could compel him to account for the funds in his hands, and pay them over, or appoint a new trustee for the better admin
That distinction still exists, and must exist. There is but one Form of proceeding, whether the relief which a party seeks be legal or equitable, or both; but he must so frame his action as to enable the court to administer the particular relief to which he is entitled. As respects the present case, this court would undoubtedly lend its aid to compel or secure the due execution of the trust, or to compel the assignee, if any portion of the fund has been lost through his neglect or mismanagement, to make good the loss to those beneficially interested. But the plaintiff comes into court and asks a judgment against the assignee for the amount of his debt, because the assignee has neglected to collect the proceeds arising out of the sale of
In accordance with the foregoing decision of the court, the judgment was reversed, with costs; with leave to the plaintiff, on payment of the costs of the appeal, to apply for any relief, by way of amendment, to which he should conceive himself entitled.