Court Opinion

ID: 5183071
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:44:41.684626+00
Date Added: 2024-06-11T08:26:38.672976
License: Public Domain

Herrick, J. (dissenting):
I find myself unable to assent to the proposition that it is unnecessary for a preferred creditor to prove his claim.
In this case it appears that before the issuing of the citation the assignee had advertised for creditors to present their claims, and that the time for such presentation had expired.
■ Hnder section 13 of chapter 466 of the Laws of 1877, as amended by chapter 318 of the Laws of 1878, it was unnecessary to *201serve a citation upon the creditors who had not duly presented their claims, and, therefore, there was no necessity to serve a citation upon the respondent in this case, unless the fact that he was named as a preferred creditor in the assignment made it unnecessary for him to prove his claim.
Section 20 provides that, upon an accounting, the county judge shall have power to “ discharge the assignee and his surety at any time upon performance of the decree from all further liability upon matters included in the accounting, to creditors appearing and to creditors not having appeared after due citation, or not having presented their claims after due advertisement.”
This means creditors, I assume, of all kinds and classes, and there is no warrant in the statute for excluding preferred creditors from the obligation of presenting and proving their claims. Being classified in the order of preference does not take them out of the term <£ creditors ” used in the statute. The fact that the assignor directs their payment first makes no difference.
The statute, section 3, requires the assignor, amongst other things, to embrace in his schedule a full and true account of all the creditors of such debtor, with the sum owing to each, and the true cause and consideration of such indebtedness. And in the case of a general assignment without preferences, the trust of the assignee is to distribute the estate amongst the persons named in the schedule, together with such others as may be present and prove their claims.
The fact that he takes the estate subject to such trust does not relieve the creditors from the obligation of proving their claims.
It has been held that a person whose name ajipears as a creditor in- the schedule of an assignor who has assigned for the benefit of creditors, but who does not present any proof of his claims to the assignee, cannot have a share in the estate. (Matter of Burdick, 10 Daly, 49.)
And the court there says that, “ to hold otherwise, would be to allow the assignor to pass upon the validity of all claims not presented or proved. The naming of a creditor in the schedule is not a presentation or proof of his claim within the meaning and intent of the statute. An assignor might name in his schedule a creditor for a fictitious debt. The creditor makes no presentation or proof *202óf his claims, thus escaping the scrutiny and examination of the other creditors, and also the necessity of substantiating his demand by his oath. It is obvious that if no distinction were made between such a claim, and claims duly presented and proved, a wide door would be opened to fraud and collusion, and an act that was passed for the benefit of creditors perverted.”
The same principle that applies to the general creditor applies to the preferred creditor ; there is no reason for any distinction between different classes of creditors, excepting the order in which they shall be paid.
The statute makes no distinction. It speaks of creditors generally, and within its terms embraces all classes of creditors, and, where the statute makes no distinction, I do not see that we can.
And the reasons given in the Matter of Burdick (supra), why a general creditor named in the schedule should prove his claim, apply with equal force to preferred creditors.
I, therefore, advise a reversal of the order appealed from.
Order affirmed, with ten dollars costs and disbursements.