Court Opinion

ID: 5183070
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:44:41.681038+00
Date Added: 2024-06-11T08:26:38.671493
License: Public Domain

Parker, P. J.:
If the citation which was issued upon the application of the assignee for a final settlement of his accounts was served upon Beverly Y oung, it is plain that he is concluded by the decree which was made in those proceedings, and that he cannot have another accounting in another proceeding instituted by himself. It is not entirely clear, however, from the record before us, whether such citation was or was not served upon him. He does not, in his petition in this proceeding, claim that it was not, nor has he filed any affidavit or made any proof to that effect. But the decree itself does not recite that the citation was served upon any one. The burden of proof, therefore, is upon the assignee to show that such service wras made before he can claim that the decree is conclusive against Young. And as there is no direct proof before us to that effect, and as the assignee, in his affidavit, does not distinctly so state, we conclude that we must consider this case upon the theory that Young was not made a party to those proceedings.
That being the case, he is not concluded by the decree in question, and is entitled to have the assignee account to him, unless by his omission to prove his claim he has waived his right to notice of the assignee’s accounting, and is barred by the decree made thereon.
Section 11 of the General Assignment Act (Chap. 466, Laws of 1877, as amended by chap. 318, Laws of 1878) provides that upon .the assignee’s petition for a final settlement of Ins accounts a citation may be issued by the County Court to “ all parties interested ” in the estate. Section 13 of such act, as so amended, provides that such citation must be served on all persons who are interested in the fund, except that if the time limited by due advertisement for creditors to present their claims has expired, creditors who have not duly presented their claims need not be served. And by section 20 *199of such act, subdivision 5, it is provided that on a final accounting the County Court has power 'to make a decree discharging the assignee from all further liability (upon matters included in the accounting) to creditors who have appeared on the accounting, to creditors who have not appeared, after being duly cited, and to those creditors who have not presented their claims against the estate after due advertisement for the same has been made.
It is claimed by the assignee that under these provisions Young, not having proved his claim against the estate, was not entitled to any notice of the accounting, and was, by the express provisions of section 20, bound by the decree made therein.
On the part of Young it is claimed that, inasmuch as he is mentioned in the second preferred class as a creditor, and the assignee is directed to pay him the debt therein specified, he was not obliged to present or to prove his claim; that his interest in the estate appears from the assignment itself, and that, therefore, he was entitled to notice of the accounting, and should not be deemed a creditor who has omitted to present his claim against the estate, within the provisions of section 20, above referred to.
The reason why a general creditor should be required to present and prove his claim, in order to become entitled to a distributive share of the estate, is apparent. If he omits to do so, within the time fixed by the advertisement for claims, it is not unjust to assume that he makes no claim, and the assignee is not required to search further for persons interested in the estate. In ordinary cases service of the citation upon those who have responded to that notice is deemed, by the statute, to reach all persons interested. But in those instances where the assignment itself, under which the assignee receives his authority to act, names a person as a creditor and specifically directs that his debt be paid, it is plain that he is a party interested, even though he has not presented his claim. And there seems to he no reason why he should be required to present or to prove a claim that is so recognized, and the duty of paying which is already imposed upon the assignee. The statute should be so construed as to carry out its plain purpose and intent.
By section 11 it is required that the citation issue to all persons interested. Surely the intent was to have it served upon all those to whom it is issued. Persons interested, therefore, are the ones *200whom the statute intends should be cited. If there had been funds sufficient, it would have been the assignee’s duty to pay Young, although he had not proved his claim. He was known to the assignee to be a person interested, and we do not think that the statute intended that he should be treated as one who was not. Nor do we believe that it was the intention of the statute to authorize an assignee to settle his accounts and take a conclusive decree distributing the estate without giving notice to those whom lie is • directed to pay.
This view has been taken at Special Term in The Matter of Gouy (13 Daly, 413), and we concur with the reasoning therein contained.
It is further claimed by the assignee that, because those preferred in the second class are to be paid only in the event that one-third of the estate, which alone is applicable to the payinent of preferred claims, is sufficient to pay the first class in full, and because such one-third was insufficient to fully pay such class, the petitioner Young stands as a general creditor, and derives no especial aid from the assignment.
But his character as a creditor, and the amount of his debt, are fixed by the assignment, and though he may not be entitled to share in the one-third of the estate as a preferred creditor, his position as a creditor entitled to a distributive share of the remaining two-thirds is apparent. Moreover, he has a plain interest in the accounting, in order to be assured that the one-third of the estate is fully accounted for and properly distributed.
We conclude that the decree in question is not a bar to the petitioner’s right to an accounting, and that, therefore, the order appealed from should be affirmed.
All concurred, except Herrick, J., dissenting.