Case ID: ad_2/html/0109-01.html
Source: Caselaw Access Project
Author: {"author": "Hatch, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

John Hynes, Appellant, v. John W. Alexander, as Assignee for the Benefit of Creditors of James and George Stewart, Respondent, Impleaded with James and George Stewart.
    
      Action to compel tm accounting by an assignee for the benefit of creditors—where the creditor can obtain relief in the statutory manner equity will not take cognizance of the action.
    
    In an action brought in the Supreme Court against an assignee for the benefit of the creditors of a partnership to compel an accounting, for the benefit of the plaintiff (a creditor) and of all other creditors similarly situated, the complaint alleged the making of the assignment; that more than a year had elapsed since it was made and that the' assignee had not rendered any account of his proceedings, but alleged no special reason why the plaintiff resorted to an action in equity instead of a proceeding for an accounting under the stathte regulating such proceedings.
    
      Held, that although a court of equity had jurisdiction of such an action it would decline to take cognizance of it, where it appeared that the statute relative to assignments afforded the plaintiff all the relief which he could obtain by proceeding in the Supreme Court in an equitable action;
    That the assignee should not be subjected unnecessarily to the trouble and burden of an action which in the end would only lead to an accounting, as provided in the statutory proceeding, nor should the assigned estate be subjected to the costs and expenses of an action unless there were exceptional grounds for such a course, in which case the reasons therefor should be. clearly alleged.
    Appeal by the plaintiff, John Hynes, from a judgment of the Supreme Court in favor of the defendant John W. Alexander, entered in the office of the clerk of the county of Westchester on the 30th day of December, 1895, upon the decision of the court rendered after a trial at the Westchester Special Term dismissing the plaintiff’s complaint, and also from an order entered in said clerk’s office* on the 30th day of November, 1895, directing the . entry of said judgment.
    
      John M-ulhollcmd, for the appellant.
    
      Ralph E. Prime, for the respondent.
   Hatch, J.:

The respondent is an assignee for' the benefit of the creditors of J. & G. Stewart, a co-partnership heretofore existing and carrying -on business in the city of New York. This action is brought in the Supreme Court for an accounting for the benefit of plaintiff, ■whose.debt is alleged, and for the benefit of all other creditors similarly situated.. The complaint alleged the making of the assignment on the 16th day of August, 1894; that more than a year has elapsed since the making thereof, and that the assignee has not rendered any account of his proceedings. No special reason is assigned why plaintiff is required to resort to an action in equity, or why he might not obtain all the redress and relief‘to which he is entitled by a proceeding for an accounting under the statute regulating such proceedings. When the cause was called for trial defendant Alexander moved to dismiss the complaint, and for judgment, on the ground that the complaint did not state a cause of action in favor of plaintiff, and because the complaint did not state any reason or cause why the- court should assume jurisdiction of the action for an accounting. The court granted the motion and dismissed the complaint, with costs. There is nothing in the decision or in the judgment entered thereon showing the ground upon which the court based its determination. But it was stated by counsel upon the argument that the decision Was placed upon the second ground above stated. We think the complaint was sufficient and stated a good cause of action. But we are also of opinion that the decision was right and that the judgment appealed from should be affirmed. By the statute is given a perfect remedy to obtain all the relief which plaintiff could succeed to if his action was prosecuted to judgment. It is quite true that a court of equity has jurisdiction of the subject-matter and can grant all necessary relief. Although it has jurisdiction it does not follow that it will assume it in all cases. Where there is a special course of procedure, provided' for a specific purpose, regulating certain proceedings and adopted for the purpose, of facilitating the disposition of matters cheaply and expeditiously, parties should be relegated to such method and not be permitted a choice of tribunals, unless some substantial reason exists therefor, which should be specifically averred. In the case of assignments by insolvent debtors the statttte provides an expeditious and cheap method of procedure w¡here the rights of all creditors can be fairly protected and the- estate cheaply administered. Under such circumstances the assignee ought not to be subjected to the vexatious trouble and burden of an action which leads in the end to an accounting for which the statute provides, nor should the assigned estate be made subject to the costs and expenses of an action and the inevitable waste which the fees of referees and other contingencies produce, as well as the costs of the action itself, unless there be exceptional grounds therefor, and such necessity ought to be clearly alleged. This view is in harmony with the current of authority,

In an action to compel an accounting by an executor, brought in the Supreme Court, the Court of Appeals thus expresses itself: There was no reason for resorting to another forum than that established by the statute for the final settlement of an executor’s accounts. * * ,* These proceedings belong, by law, to Surrogates’ Courts, which were constituted to take jurisdiction of them and the powers of which are appropriate and adequate for the purpose.” (Hard v. Ashley, 117 N. Y. 611.) The same rule has been recognized in other cases. (Chipman v. Montgomery, 63 N. Y. 221; Uhlman v. N. Y. Life Ins. Co., 109 id. 421.)

These cases are particularly applicable, as the statute itself makes' proceedings to compel an accounting by an assignee to correspond with an accounting of executors in Surrogates’ Courts (1 Birdseye Stat. 129, § 20, subd. 9), and the Supreme Court is given concurrent power with the County Court and county judge. (Id. 131, § 30.)

This view is not in conflict with Hurth v. Bower (30 Hun, 151). There the complaint alleged the misconduct of the assignee and assigned a sufficient reason for the intervention of the equitable power’s of the court. And while the language used is quite broad, yet we think it should be held as limited and applied to the case there under consideration.* In all the cases which have fallen under our observation where the Supreme Court has assumed to exercise jurisdiction in this class of cases, some special reason was assigned in the complaint or no "question was raised respecting it. For these reasons we think the judgment appealed from should be affirmed, with costs.

All concurred.

■Judgment affirmed, with costs.