Butt v. Peck , 1 Daly 83 ( 1860 )

By the Court.

Brady, J.

I adhere to the opinion expressed at special term in relation to that clause of -the assignment which provides for the payment by the assignee of the just and reasonable expenses, costs, and charges, and commissions of executing and carrying into effect the assignment, and all reasonable and proper charges for attorney and counsel fees respecting the same. I deem it proper to say, in addition, that the case of Dunham v. Waterman, 17 N. Y. Rep. 9, was not published when that opinion was written, and that I consider this distinguishable from that case. The assignees of Waterman were authorized to pay any such sum or sums of money, as they might find proper and expedient, in and about the management of the assigned estate, or payment of the hands employed, or to be employed in or about the same, or in the business of completing the manufacture of any of the said property, or fitting the same for sale, or of working up materials, &c., so as to realize' the greatest possible amount of money therefrom, as in the judgment of the said assignees" should seem most advisable, and it was said of that provision, that it vested in the assignees a discretionary power, the exercise of which could not be interfered with except for fraud or want of good faith on the part of the assignees. Ho discretionary nower is given to the assignee in this case. He is directed to pay charges and expenses which have been recognized and allowed in similar trusts, it being a condition precedent to such payment however, that the expenses shall be reasonable and. proper, and as they are to he reasonable and proper, they are subjected to the scrutiny of the courts of justice, and not alone to the judgment and discretion of the assignee. In Dunham v. Waterman the assignees were granted authority to deal, to some extent at least, with the assigned estate as if it were their own, and the discretion as to the manufacturing was one absolutely conferred, and over which, in the absence of fraud or -want of good faith, the Court could exercise no power. The discretion was unusual, and in contravention of well settled principles. Not so however the discretion to pay expenses and counselfees which were always incidental to, and formed a part of, the trust. When the assignor directed and authorized the assignee to manufacture, he authorized an act which would lead to delay, and which had never been tolerated by" the courts, although upon a proper application, the assignment being silent on the subject, the courts might permit the assignee to convert material of the estate, as suggested in Dunham v. Waterman.

In this case no rule of law was contravened. Ho application for leave to pay expenses would be necessary. The amounts disbursed by the assignee in that respect would be matters of accounting, and therefore, when the assignors directed the assignee to pay such expenses and charges, they merely declared a right incidental to assignments settled and established by precedent, practice and authority. This position does not, therefore, " overlook the distinction between a duty imposed by law, and a power conferred by an individual.”

I do not agree either to the proposition that the clause in the assignment which relates to schedule “ A.,” makes the assignment void. I think the objectionable language," debts to grow due” used therein, must be understood to mean claims that have matured, and resting either on notes, bonds, or other obligations, or upon credits which had not expired, and which were easily and readily capable of being ascertained. In other words it is a direction to pay Child and ¡Fullerton their claims against assignors, existing at the time of the assignment, and not to pay them for services to be subsequently rendered, either to the assignee, or to the assignors. The assignee had already been authorized to pay all reasonable and proper charges, -for attorney and counsel fees respecting the assignment. He was not directed to employ either Child or Fullerton, and the counsel not being named by the assignors, could be selected by. the assignee at pleasure. That this view is correct appears to me conclusively from the schedule “A,” in which, although the amounts are left blank, the direction is to pay, “ Asa Child, amount due him for services, counsel fee and costs,” and “ William Fullerton, amount due him, for services performed.'1'’ I see nothing in this feature of the assignment which would prevent the courts from interfering with the assignee. It is very clear that the amounts left in blank could he 'easily ascertained, and that if the creditors, Messrs. Child and Fullerton, refused or neglected to furnish them, the assignee could not for that reason be arrested in the performance of his trust. Those creditors would have to take the responsibility.of refusing, or neglecting to present their claims upon a proper application by the assignee. I think for these reasons, that the judgment should be affirmed. I agree with Judge Hilton in the general views expressed by him as to the result of the cases and the policy of the law, but I think the assignors in this case have not encountered any of the principles which have been fatally applied to assignments.

Daly, F: J.

I agree with Judge Beady, that there is nothing in this assignment that would warrant us in declaring it fraudulent and void. There is nothing in the "provisions relied upon as having that effect, that would bring them within the reasons laid down by the Court of Appeals for their judgment in Nicholson v. Leavitt^ and Dunham v. Waterman.

Hilton, J., dissented, •

Judginent a~1rn.ied.