Court Opinion

ID: 6999887
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:40:11.083205+00
Date Added: 2024-06-11T16:09:53.621070
License: Public Domain

Me. Justice Bigelow dissenting. I am unable to agree with the majority of the court in .affirming the judgment in this case. The claim, as verified 'and filed, was clearly intended to be prosecuted by the .claimant as a preferred claim against the insolvent’s estate. It was not objected to because the ground for. the claim was not sufficient to give it the character of a preferred claim; nor was it objected to for any reason whatever, by -•any creditor of the assignee, or any other person interested in the -estate, .as provided by section 5 of the assignment ‘.act; hence it may be said, that all such persons were in the position of one who, when sued, makes default. Under-such circumstances, it would seem that no special order of the court was necessary to establish the claim, either as to its amount or its quality. It was a-trust claim while the assignor was managing the trust, and he never in fact turned • the money over to his successor in trust, but it remained in Seiter’s so-called bank when he made an assignment, and the probability is that Seiter’s creditors believed, that the claim would necessarily have to be paid in full before the general creditors would be permitted to share in the assets of the estate; and this evidently was the reason why they did not object to its allowance as a preferred-claim until long after the time allowed by said section 5'-had elapsed. Under such circumstances, if the assignee did Avrong in paying the claim in full, it may be fairly claimed that he Avas led to do it by the neglect of the creditors in. not objecting to the quality of the claim, and having its character established by the court in the time and manner provided by law, for the future guidance of the assignee. But if the action of the assignee in paying the claim as' preferred Avas irregular, the time to have cured the irregularity was the time fixed by the court to hear the objections filed to the report. When this time arrived the objectors again made default by not appearing to urge - their objections, and the court was justified in the conclusion that the objections were waived, and that, in substance, is what the court’s finding was, and if it was wrong the fault lay at the door of- the objectors. Under the circumstances the approval of the report was clearly an adjudication" by the court, of Avhich the objecting creditors were bound to take notice. Ho motion was made at the September term of the court to vacate the order approving the report and hear the objections on their merits, nor did the objectors appeal from the order as they should have done if dissatisfied Avith it, but remained quiescent with full knowledge of what had been done until the 29th of October following, when they made a motion to set aside the order approving the assignee’s report, which was allowed, and-some months thereafter and on the 17th of February, 1898, the court reversed its order of September 23d, without notice to the trustee to whom the money had been paid, and ordered the assignee to collect the money from him instead of ordering the trustee to refund it, as would seem the proper thing to have done if it had jurisdiction of the trustee. It is not claimed that any fraud was practiced on the court that caused it to make the order of September 23d, but the claim is that the court acted upon the understanding that the objectors had withdrawn their objections to the report, and that the court afterward concluded it was mistaken. It may well be asked, where were the objectors and their counsel when the order was made ? It should clearly appear from the record itself that the judgment was an agreed judgment of the parties, otherwise the conclusion is irresistible that it was the judicial determination of the court, and could not be overturned because of any misunderstanding of either law or fact. I do not think the question whether the assignor mixed and mingled the trust fund with his own private funds, so that the former lost its identity, or what the law may be in relation to the matter if it was mixed and lost its identity, properly arises in this case. These questions were settled by the order approving the assignee’s report, which has not been appealed from or legally vacated. The question whether the claim -filed by the trustee should be paid before the general creditors should share in the assets of the insolvent, required an immediate answer, and when once answered it should not have been opened for further dispute, and the proceedings opening it, with all that was thereafter done, were, in my opinion, absolutely void, and should be reversed.