1 Edw. Ch. 195 | New York Court of Chancery | 1831
In this case it is first contended, that the creditors have no rights under the assignment and cannot call the assignees to any account, without complying or •offering to comply with the condition of the assignment; and which, it is said, requires the creditors to discharge their debtor from all further demands before they can participate in the property assigned. Whether this be so, depends upon the meaning of the instrument: for it is undoubtedly true, that when a debtor makes a voluntary assignment of his property; and the creditors choose to come in under it and claim the benefit of its provisions, they must comply with such terms or conditions as the debtor has thought proper to impose. The question arises upon the clause introduced by way of proviso: that should there not be sufficient to pay the debts in full, then the assignees are authorized to compromise as to the same, requiring discharges on payment of the dividend. I do not understand this clause as amounting to a condition that the creditors shall release their whole demands or not participate in the dividends of the trust property. It is not so expressed. Such a construction would render the assignment void, as fraudulent in law. It is the business of this court to
I am of opinion there has been no waiver or abandonment of the right to come in under the assignment and ask for a distribution of the trust funds.
It is to be observed, the objection is not made by the debtor. He has suffered the bill to be taken as confessed; and thereby admits the creditors have a right to an account and distribution. Nor does he insist upon the performance of any conditions by them. Under these circumstances, the defendant Woodward will be protected from all liability to the debtor, his assignor, when he has accounted and paid over the money under the decree of this court. This indemnity is all he is entitled to ask.
I must confirm the master’s report as respects the allowance of six hundred and forty-three dollars and eighty-eight cents to the defendant Woodward for his services as acting trustee.
There is, however, another part of the report which I think requires to be modified. I allude to the disbursements for counsel fees, amounting to seventy dollars. I shall permit the defendant to retain this sum out of the balance in his hands. It does not appear he has improperly or unnecessarily litigated the matter. From the course which the creditors have pursued against Porter,' the assignee was justified in not paying over the funds, except under the direction of the court. He is entitled to be indemnified in his costs and counsel fees. He is to pay the balance into court, which is to be distributed among those creditors who shall come in and prove their demands before the master.
Upon payment of this balance into court, the defendant Woodward is to be discharged from the trust.