Court Opinion

ID: 5182995
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:44:36.448829+00
Date Added: 2024-06-11T08:26:38.517595
License: Public Domain

Williams, J.:
The order appealed from was made upon affidavits showing that the moving party, a New York corporation, was the creditor of the assignor, an Ohio corporation, to the amount of $706.30, for goods sold and delivered; that the assignment was made July 19, 1897, to and "accepted by the assignee, and filed and recorded in the clerk’s office of the city of New York; that the creditor desired its principal bookkeeper to inspect and examine the books and papers of the assignor, and instructed him to request the assignee to allow such inspection and examination to be made; that pursuant to such instructions on the 5th day of August, 1897, the bookkeeper requested the assignee to permit such inspection and examination,- and that the assignee replied that he could not allow the boobs to be examined and inspected as they were not there, and that they might ' be in Cincinnati; that he would not say where they were, and refused any further information. No affidavits were read in behalf of the. assignee, who had notice and appeared upon the hearing of the motion.
It is claimed on behalf of the assignee that there is no law, stat*516utory or otherwise, which authorized the court to make the order merely because the • creditor desired to make the inspection and examination of the books and papers and the assignee refused it; that the order could only be made upon its appearing that such inspection and examination was necessary for some purpose disclosed in the papers upon which the order was made. It must be noticed that this Order was not made under section 21 of the Assignment Act (Laws of 1877, chap. 466), which provides for an examination of witnesses and the .production of the books and papers before a referee. The order was made under section 3 of the act, as amended by chapter 318 of the Laws of 1878, so far as there was any statutory power to make it. That section provides that' the debtor shall make an inventory or schedule within twenty days after the date of the assign- ■ ment, and that,'in case the debtor shall omit, neglect or refuse to make it within the twenty days, the assignee, within thirty - days after the date of the assignment, shall make the schedule or inventory; and for such purpose the county judge, upon the application, of the assignee, may by order compel' such deli/nqúemt debtor -and any other person to- appear and be examined, and the county judge may extend the assignee’s time for making the inventory or schedule-beyond the thirty days, and if the assignee fail to make it within the thirty days or the further time allowed, the county judge shall by order require the assignee to show cause why he should not be. removed, and any one interested in the trust may apply for such order, and then the provision in question here, follows in these words“ The books and papers of such delinquent debtor shall at all times be subject to the inspection and examination of any creditor. The county judge is authorized- by order to require such debtor or assignee to allow such inspection or examination. Dis- ■ obedience to such order is hereby declared to be a contempt, and obedience to such order may be enforced by attachment.” The section then closes with a provision for the filing of the inventory or schedule by the county judge in the office where the assignment is recorded. It is said that this provision is applicable only to a ■ debtor who fails to make the inventory or schedule as required in this section, and such delinquency not having been shown by' the moving papers here, the order was not authorized by this 'statute. We think this is too narrow a construction of this statute. The *517statute provides that the hooks and papers shall “ at all times ” be subject to inspection and examination, not merely after the debtor is so deli/iiquent. The statute was. treating in this section of the making of the inventory and schedule, and the assignor was therein designated as a debtor and a “ delinquent debtor,” but'we think the intention of the Legislature was to jirovide that a creditor might at any and all times inspect and examine the books and papers of the assignor, and the words debtor and delinquent debtor were in this section used as synonymous with the word assignor.
This construction is in harmony with our views of the rights of the creditors. The assignee is not appointed to protect or shield the debtor or to secrete his affairs from his creditors. The business of the assignor in the hands of his assignee should be thrown open to the examination of the creditors, in order that they may be able to examine and see whether there has been any dishonesty in making ■the assignment, whether any property has been improperly disposed of or withheld from the assignment, and whether the assignment is valid or invalid. Neither the assignor nor the. assignee should be permitted to refuse an inspection or examination of the books and papers of the assignor without any reason being alleged, and thus prevent the creditors from satisfying themselves as to the honesty of the assignment. In this case the assignee, at the time the request was made for an inspection and examination of the books and papers, said that they were not there, but he produced" no affidavits upon the hearing of the motion that he had not the custody of the books and papers, or that there was any other reason why he could not comply with the request or with the order if made. In the absence of such showing it was fairly to be presumed that the books and papers were where they .should be, in his custody or under his control.
We think the creditor was entitled of right to inspect the books and papers because he desired to do so, and that it was not necessary for him to show in support of the motion that there was some reason why it was necessary that he should do so. We may assume that he desired to make the inspection and examination to ascertain whether there was any dishonesty in the assignment, and that was a sufficient reason.
The fair • protection of creditors against fraud and dishonesty in *518assignments requires that there should be the fullest access by the creditors to the books and papers of the assignor.
Our conclusion is, that the order was properly granted under the provision in section 3 of the Assignment Act above quoted, and that it should1 be affirmed, with ten dollars costs and disbursements.
Yaw Brunt,' P. J., Patterson, O’Brien and Ingraham, JJ., concurred.
Order affirmed, with ten dollars costs and disbursements.