Hynes v. Campbell

Barnard, P. J.

The plaintiff is a judgment creditor of the defendant Daniel Van Winkle. He is also a preferred creditor under the assignment made by Van Winkle to the defendant Campbell. Soon after the assignment a composition deed was entered into whereby certain of the unpreferred creditors agreed to accept 20 cents in satisfaction of their debts. This agreement included nearly all the unpreferred debts of Campbell. The stock and business of the assignor was such that the firm of Karst & Costello wished to form a company and buy it in gross for a sum sufficient to pay all the debts under this composition. The amount was fixed at $8,500. Karst & Costello paid $2,500 in cash to Campbell with which to pay the unpreferred debts, which he did so far as the same would go, and which sum nearly paid up the unpreferred claims against Campbell. The balance of the $2,500 was used for the estate expenses. Karst & Costello then refused to carry out the agreement. The property was not delivered, and the $2,500 was not returned. Karst & Costello were not among the Creditors of Campbell, but were to be interested in the company to be formed. The assignee is liable to account for this $2,500. It was an executory sale of the stock to Karst & Costello. It is true, it was based upon an expectation that the company’s scheme would have been carried out, but it was a receipt of part payment for the sale. The motive which led the firm to require, the payment of the unpreferred creditors with this part payment has no relevancy. The assignor was bound to execute the assignment, and, if he paid unpreferred debts before the balance of the $8,500 was paid, he did so at his own risk. The $2,500 belonged to the trust-estate, and the referee properly held it to be assets. The judgment should be affirmed, with costs.

Barnard, P. J.

The plaintiff is a judgment creditor of Daniel Van Winkle, one of the defendants. Van Winkle assigned to William A. Campbell, the other defendant, for the benefit of his creditors. The plaintiff was a preferred creditor in the order of distribution under the assignment. This action is brought by the plaintiff for himself and others similarly situated for an accounting. A decree has been entered, and an appeaLis brought by each party. The plaintiff appeals from that part of the judgment which gives $75 costs to assignee, and which allows him his disbursements. The general rule is that all necessary costs and disbursements are chargeable to the trust fund. The amount allowed to the assignee was a moderate sum, and the expenses *508were all incurred after the account was filed. There was no evidence of bad faith upon the part of the assignee, even in the particular case where he was decreed to be wrong, so as to make it proper to put the costs upon him personally. Code, § 3246. The part of the judgment affected by the plaintiff’s appeal should be affirmed, with costs.