In re the Assignment of Smith

10 Daly 106

• Court: New York Court of Common Pleas
• Decided: May 27, 1882
• Status: Published

Opinion

J. F. Daly, J.

The chief ground for the removal of the assignee, and the only one that need be considered on the proofs before me, is his action in selling the assigned stock in bulk to B. O. Huntington ; and that sale is attacked for inadequacy of price and on the ground that it was not an actual sale, but a mere device to save the property from execution creditors.

On the question of adequacy of price there is much uncertainty, and the affidavits make it a fair question whether for a sale in bulk of the whole stock it was not a good sale, and whether the result will not be better for the estate than a sale at auction after paying auctioneer’s fees and the expenses, or a sale over the counter with the large expenses attendant thereon.

On the question of bona tides it is sufficient to say that if the price be a good one the estate will lose nothing, because the assignee is bound to account for such price in cash, and it is only a question of his solvency and that of his sureties. Circumstances going to show that he made this sale hurriedly in order to save the stock from executions issued by creditors who sought to seize it in disregard of the assignment, will not be considered if the sale were a good one, i. e., for a good price, as that disposition of the property results in benefit to the assigned estate although tlie execution creditors may be baulked. In administering the estate under the assignment we are not to regard the complaints of execution creditors who are seeking to wrest the estate from the general creditors under the assignment and appropriate it under their own executions.

The questions arising on this application as to the propriety of the assignee’s acts are such as may be fully inquired into upon his accounting. He is now and will be then chargeable at least with the price at which he sold to Huntington. If he sold the stock in bad faith below its real value he will be liable for its real value and will be charged accordingly.

The assignee has given his own undertaking to save the stock from attaching creditors and thus manifested a desire to protect the property for the purposes of the assignment.

Under the state of proofs presented on this application I think it should be denied, but without costs.

Application denied.