Haight, J.
This action was brought by the plaintiff, a domestic corporation, as a judgment creditor in behalf of itself and all other creditors of the firm of Buckley & Co., who might desire to join in the action to set aside as fraudulent a general assignment for the benefit of creditors made by the members of the firm of Buckley & Co., as such, and as individuals, to Patrick F. Bulger; and also to set aside as fraudulent certain judgments entered in favor of Thomas "Wheeler, Daniel G-. Major and Chloe Spencer against Buckley & Co.
The firm of Buckley & Co. and the members thereof were insolvent. The assignment was executed and delivered on the 17th of March, 1886. In it the assignee is described as the party of the second part.
It provides that: “ Fifth. After the payment in full of all of the copartnership debts designated in Schedules A and B, as above directed, the said party of the second part
shall pay
all and singular the copartnership debts set forth and enumerated in the schedule hereto annexed, marked C,
in full
with interest.”
“ Sixth. After the payment
m full
of the copartnership debts set forth in Schedules A, B and 0., as above directed, the said party of the second part shall pay all and singular the copartnership debts set forth in a schedule hereto annexed, marked D, with interest.”
Schedule 0 referred to and forming a part of the attached assignment contains a statement of the names of the creditors, third named, as preferred in the assignment, the general nature of such indebtedness and the amount thereof. In it appears the following:
“Name of creditor, Daniel Gr. Major; residence, Washington, D. C.; consideration, money loaned; form of debt, accounts and notes which assignors are unable to describe.
“ Amount about................ $12, 000
“ Date for interest.............. 1, 000 Jan. 12, 1883.
1, 500 Aug. 8, 1888.
500 Oct. 4, 1884.
1,000 Feb. 4,1884.
3, 000 Feb. 10, 1884.
5, 000 May 23, 1884.
“
as near as assignors are able to state.”
On the 1th day of April, 1886, John Buckley and William E. Shirley, as such assignors, filed their inventory and .schedules duly verified as required by law, and amongst the firm debts set out by them in the schedule so filed is an indebtedness to Daniel Gr. Major, which is described as follows:
“ Daniel Gr. Major, Washington, D. C., $12, 000.
“ Accounts and Notes:
“ Jan. 12, 1883........................... $1, 000'
“ Aug. 8, 1883........................... 1, 500
“
Oct. 4, 1883.............. money loaned 500
“ Feb. 1,1884........................... 1,000
“ Feb. 10, 1884........................... 3, 000
“ May 23, 1884 .......................... 5, 000 ”
Major was a brother in law of the assignor John Buckley,
and the amount of his claim so preferred, with interest, was the sum of $13,501.70.
The referee has found the following facts:
“ Fifteenth. That at the date of the making, execution and delivery of said assignment, the item of $1,500, August 8, 1883, so preferred in said assignment and set out in said schedules, had been paid off and discharged, the same having been paid by Buckley & Co. to Daniel Gr. Major, by check of Buckley & Co. on the Oneida County Bank, to the order of Daniel Gr. Major, dated December 11, 1883, for $1,530.75, which check was duly paid Daniel Gr. Major by said Oneida County Bank and said check being given for $1,500 as the principal and $30.75 as the interest due on said loan of August 8, 1883.”
“ Sixteenth. That at the time of the making, executing and delivery of said assignment the following items so preferred therein on behalf of Daniel Gr. Major, viz., $1,000, January 12, 1883; $5,000, May 23, 1884, formed- no part of the items of indebtedness then due or owing by Buckley & Co. to Daniel Gr. Major, nor do the said items, or either of them, appear upon the books of Buckley
&
Co. as amounts due by their firm to Daniel Gr. Major.” •
The referee further found as facts that
“
the indebtedness of Buckley & Co. to Daniel Gr. Major on the 17th day of March, 1886, including interest, to be as follows:
“ Mote dated Feb. 26, 1883, on demand, with
interest, for............................. $1,000 00
“ Interest on same..................... 183 50
“ Mote dated June 1, 1883, on demand, with
interest, for............................. ■ 1,000 00
“ Interest on same..................... 167 67
“Mote dated Oct. 4,1883, on demand, with interest, for................................. 500 00
“ Interest on same..................... 73 58
“Mote dated January 31,1884, on demand, with
interest, for............................. 1,000 00
“ Interest on same..................... 127 67
“ Note dated Feb. 12, 1884, in one year, with
interest, for............................. $3,000 00
“ Interest on same..................... 377 50
“ Note dated May 6,1884, on demand, with interest, for.................................. 3,000 00
“
Interest on same..................... 335 50
“ Cash advanced by check, May 6,1884........ 500 00
“ Interest on same..................... 55 91
“ Cash advanced to pay note given for accommodation of Buckley & Co., May 17, 1884..... 2,538 75
“ Interest on same..................... 279 27
“ Making a total of.................. $14,139 35
“ As against this claim there are credits of money paid to Major from time to time by Buckley & Co., as follows, viz.:
“June 6, 1884, by check................... $1,000 00
“ Interest to March 17, 1886 ............ 106 83
“ October, 1884, by cash.................... 100 00
“ Interest thereon..................... 8 50
“ December 18,1884, by check............. 50 00
“Interest............................. 3 74
“ November 15, 1884, by check.............. 50 00
“ Interest............................. 4 02
“ February 5, 1885, by two checks........... 100 00
“ Interest........................ 6 70
“ February 25, 1885, by check............... 50 00
“ Interest............................. 3 18
“Making a total credit............... $1,482 97
“ Leaving a total debit...............$12,656 38”
He further found that the assignment was made in good faith, with no intent to hinder, delay or defraud creditors; and, as a conclusion of law, that the preference in the assignment of the debt of Major was a valid preference to the amount of $12,656.38.
It also appears in the facts found by the referee that Major brought action against Buckley and Shirley upon his claim for money loaned, etc., and that on the eighteenth day of March,, the day after the assignment, the defendants appeared by M. W. Van Auken, their attorney, and made an offer of judgment, and that such offer was accepted and thereupon judgment was entered for $13,501.70 'damages and $19.39- costs, being for the same items and amount for which he was preferred in the assignment.
The referee found that the recovery should only have been for the sum of $12,658.24; that for that amount with costs it was a good and valid judgment and might he enforced.
It will be observed that of the items of the claim so preferred that of $1,500 of August 8, 1883, was fully paid and satisfied on the eleventh of December thereafter, and that of $1,000, January 12, 1883, and $5,000, May 23, 1884, had no existence in fact, making a total of $7,500 that was fictitious at the time the assignment was made.
It is contended, however, that it was the indebtedness of Major that was preferred, and not the items making up such indebtedness, and that a mistake in giving the items should not avoid the assignment, provided that other items of indebtedness in fact existed. This view would deprive the other creditors of the advantage given them by the statute of knowing “the true cause and consideration” of the claim, but without assenting to the correctness of the proposition we may for the purposes of this argument assume it to be sound. The fact still remains that the amount actually owing Major falls short of the amount preferred in the sum of $845.32.
The statute provides that
“
a debtor making an assignment shall at the date thereof, or within twenty days thereafter, cause to be made and delivered to the clerk of the county where such assignment is recorded an inventory or schedule containing * * * 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 therefor, and a full statement of any existing
security for the payment of the same.” (4 R. S. [8th ed.] 2537, § 3.)
Pursuant to this provision the assignors made and filed their inventory or schedule in which the same items were described as accounts and notes as then owing to Major, without any qualifying words. The inventory must be regarded as part of the transaction and is to be read in connection wfith the assignment in respect to the matters which it is required by law to contain. (Burrell on Assignments, § 151;
Terry
v. Butler, 43 Barb. 395;
Kavanagh
v. Beckwith, 44 Barb. 192-197.)
The assignment in describing the form of the debt states that it is accounts and notes
which assignors are unable to
describe, and amount due
about
$12,000, and after giving the items is added, “ as near as assignors are able to state.”
As we have seen, the inventory was filed twenty days thereafter, and in it the amount and items are stated without qualifying words, thus indicating that at that time the assignors were possessed of the requisite information to correctly describe them. This inventory we are to read in connection with the assignment, and so reading the instruments, we think that it is apparent that the assignors not only have, but intended to absolutely and unqualifiedly prefer the claim of Major to the amount stated. This view is strengthened from the provisions of the assignment referred to, for they require the payment of “ all and singular, the copartnership debts set forth and enumerated in the' schedule hereto annexed, marked ‘ C ’ in full, with interest,” and that is to be done before any payment can be made of the claims enumerated in Schedule “ D,” or other subsequent schedules, for it is only after the payment in full of the debts set forth in Schedule
“
C,” that the assignee is directed to pay those in Schedule “ D.” We thus have the positive and unqualified direction to pay Major’s debt in full, with interest, as set forth and enumerated in the schedule. As to this payment, the assignee is given no discretion.
In the
Matter of the Assignment of Lewis
(81 N.
Y.
421, 424), Enron, J., in delivering the opinion of the court, says: “ 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 the same way, and can only be exercised to compel his performance of a 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 the assignment, and the statutory provisions merely regulate and "guard his exercise of an authority derived from the will of the assignor. The courts, therefore, cannot direct him to pay a debt of the assignor, or give it preference, in violation of the terms of the same, and the right of creditors under it. To hold the contrary would be to put the court in the place of the assignor, and assert a right to modify the terms of the assignment, after it had taken effect, against the will of its maker, and to the injury of those protected by it. We agree that the assignee is merely the representative of the debtor, and must be governed by the express terms of his trust.”
In the case of
Chapin
v.
Thompson
(89 N. Y. 270), it was held that the assignee could not modify or change the provisions of the assignment, or prevent the payment of a debt provided for in the assignment, even if it was usurious.
In the
Matter of the Assignment of Ward
(10 Daly, 66), it was held that the duty of the assignee for the benefit of creditors is to uphold his trust, not to impeach it; that he cannot object to the payment of a creditor preferred in the assignment, even upon the ground that the claim is fraudulent.
Bishop on Insolvent Debtors, section 359, says: “A general assignment for the benefit- of creditors, by its own terms devotes the debtor’s property to the payment of some or all' of the assignor’s debts, and the debts provided for may be specified in the instrument itself, or they may be left to be otherwise determined. When the assignment provides for the payment of specific debts, neither the assignee nor any creditor claiming under the assignment can dispute their validity.
(Pratt
v. Adams, 7 Paige, 615;
Jewett
v.
Wood
ward,
1 Edward’s Ch. 195;
Green
v.
Morse,
4 Barb. 332;
Maynard
v.
Maynard,
4 Edward’s Ch. 711.)
“
The question is one of intent, to be gathered from a fair construction of the deed of assignment. If the assignee is directed to pay certain persons upon certain specified amounts, either with priorities or proportionately, the assignee who accepts the trust and all the creditors who come in and share under it, are bound by the provisions of the deed and cannot dispute them. This proposition which rests on the doctrines of election, that he who accepts a benefit under an instrument cannot dispute the validity of its provisions, is abundantly sustained by the authorities. * * * If the claims so provided for are fictitous or fraudulent, or such as for any reason ought not to be paid, that will be a ground for setting the assignment aside as fraudulent and void, but it will not furnish a ground upon which a creditor claiming under the assignment as a valid instrument can dispute the claim of another creditor provided for in the same manner in the same instrument.”
(Nicholson
v.
Leavitt,
6 N. Y. 519;
Green
v.
Morse,
4 Barb. 332, 342;
Knower
v.
Central Nationel Bank,
124 N. Y. 552-558;
Maack
v.
Maack,
49 Hun, 507;
Pratt
v.
Adams,
7 Paige, 615, 641.)
In the case of
Kavanagh
v.
Beckwith (supra),
it was held in the General Term that the assignee was not bound to pay the debts at the amount stated in the assignment. The assignment in that case required the assignee to pay “ the debts due or to grow due from the assignor
for which he is liable
The amount in the assignment was over-stated, but the true amount was stated by the assignor in the inventory subsequently filed by him. Reading the inventory in connection with the assignment, which required the assignee to only pay the amount for which the assignor was liable, and that true amount appearing in the inventory, presented a very different, question from that in the case under consideration.
The rule to which we have referred may have no application to the general and unpreferred creditors, especially when as in this case, the assignment provides that in case there shall
be any remainder after paying the preferred creditors in full that the other creditors may be paid the amount that may be
owing
to them respectively. The amount of their claims is not specified and the assignee is left to determine the same, but as we have seen it is very different with the favored creditors.
If, therefore, the assignee was required to pay the amount of Major’s claim as stated and described, it would of necessity follow that the general creditors would be defrauded in the amount that such preference was in excess of that which was in fact owing.
The referee has said that the assignment was made in good faith and without intent to hinder, delay or defraud the creditors, but the provisions of the assignment carried out deprives the general creditors of this sum, and the rule is that every party must be deemed to have intended the natural and inevitable consequences of his acts and where his acts are voluntary and necessarily operate to defraud others he must be deemed to have intended the fraud. •
In the case of
Coleman
v.
Burr
(93 N. Y. 17-31), the referee found that the transaction was fair and honest. He, however, found facts from which the inference of fraud was inevitable. It was held on review that his characterizing the transaction as fair and honest did not make them innocent or change their essential character in the eye of the law; that he must be deemed to have intended to hinder, delay and defraud his creditors.
(Cunningham
v. Freeborn, 11 Wendell, 241-252;
Ford
v.
Williams,
24 N. Y. 359;
Edgell
v.
Hart,
9 id. 213;
Wilson
v.
Robertson,
21 id. 587-593.)
It may be said that the excessive preference was small in amount. Undoubtedly innocent errors of small amounts resulting in no material loss to the creditors may be disregarded, but in this case the excess is of a substantial amount and if paid over to Major would result in a material loss to the unfavored creditors.
If the assignment is fraudulent in part, the whole instrument is void.
(Mackie
v.
Cairns,
5 Cow. 547;
Grover
v.
Wakeman,
11 Wend. 187-225;
Simons
v.
Goldbach,
56 Hun, 204; affirmed, 123 N. Y. 657;
Russell
v.
Winne,
37 N. Y. 591.)
Ho relief by way of a reformation of the assignment was asked for in the pleadings, and we are consequently not called upon to determine whether a court of equity would entertain such an action.
The appeal was properly brought by Yietor and Achilles. They were attaching creditors, and the amount of their claim is admitted by the inventory filed. The action was brought by the plaintiff on behalf of itself and all other creditors of the firm who desired to join with it in the action. Yietor and Achilles were made defendants and answered, admitting the allegations of the complaint as to charges of fraud by' Buckley
&
Co., and joined with the plaintiff in the action. The judgment took from them the benefit they claim through their attachment on the property of the assignors, and required them to turn it over to the assignee. They consequently had the right to appeal.
We have not thought it advisable to consider or discuss at this time the questions that arise upon the modification of the Major judgment, for upon a new trial evidence may be produced materially changing the facts.
We think the evidence supports the findings of the referee as to the claims of Adelia J. Sparks and Chloe Spencer, but are unable to find authority permitting him to change the assignment’as to the amount directed to be paid to Daniel G. Major.
The judgment should be reversed and a new trial granted, with costs to abide the event.
All concur, except Follett, Oh. J., and Yarn, J., dissenting.
Judgment reversed.