Court Opinion

ID: 7332670
Source: CourtListenerOpinion
Date Created: 2022-07-25 22:18:57.66061+00
Date Added: 2024-06-11T16:20:10.742700
License: Public Domain

HERRICK, J.
(dissenting). I find myself unable to assent to the his claim. In tMs 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. Under section 13 of chapter 466 of the Laws of 1877, as amended by chapter 318 of the Laws of 1878, it was therefore unnecessary to serve a citation upon the creditors who had not duly presented their claims; and thereforé 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 Mm to prove his claim. Section 20 provides that upon an accounting the county judge shall have power to “discharge the assignee and Ms 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 Mnds 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, among other tMngs, 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 among 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 appears 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. In re Burdick, 10 Dalv, 49. And the court there says that:
“To hold otherwise would he to allow the assignor to pass upon the validity of all claims not presented or proved. The naming of a creditor in the schedulo *1032is not a presentation or proof of his claim, within the meaning and intent of the statute. An assignor may name in his schedule a creditor for a fictitious debt. The creditor who makes no presentation or proof of his claims thus escapes the scrutiny and examination of 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 the claims duly presented and proved, a wide door would he 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 Be Burdick 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.