Pratt v. Rathbun

7 Paige Ch. 269

• Court: New York Court of Chancery
• Decided: September 18, 1838
• Status: Published

Opinion

The Chancellor.

The petitioners show that they have a right to be placed in the class of preferred creditors, and 1 think the excuse is sufficient to entitle them now to come in and establish the facts before the master. In creditors’ suits, or others where the creditors are required to come in before a master and establish their claims under a decree, it is not the practice of this court to hold them to very strict terms as to the time when they shall come in and prove their debts ; so long as it can be done without injustice to other parties. And in this suit I have already permitted some creditors, who had neglected to prove their claims within the time prescribed by the master, to come in and make their proof, upon payment of the extra costs occasioned by their negligence. The petitioners must therefore have leave to go again before the master for the purpose of establishing their right to be placed in the class of preferred creditors, so as to place them upon an equality with other preferred creditors in case the fund is not more than sufficient to pay the preferred debts. But as equality among creditors is equity, and the petitioners have made a slip, by which they have lost the priority which the assignor intended to give them, over other creditors who had an equal claim in equity to a rateable proportion of the assigned fund, they must be let in to establish their claim to be placed in the class of preferred creditors, upon the express condition that if the fund is more than sufficient to pay the preferred creditors, they are, as between themselves and the creditors who are not preferred, to be placed upon the terms of perfect equality in the distribution of the fund. They must also pay to the solicitors of the parties who have appeared on this application the extra expense caused by this motion, and the costs of such further proof; to be taxed and allowed by the master.