Matter of Bowery National Bank.

under the statute; and he will do so if adverse proceedings in bankruptcy are pending.

Application by a creditor to compel assignee for benefit of creditors to account.

On return day of citation, issued by one of the judges of this court, as county judge, on the petition of the Bowery National Bank, a creditor of Wm. B. Duncan, requiring Wm. D. Shipman, assignee, in an assignment by the said Wm. B. Duncan, individually, and by his firm (Duncan, Sherman & Co.), to show cause why he, said assignee, should not render an account of his trust, it appears:

I. That several actions are now pending in the courts of this State, brought by judgment creditors of the assignors, to have the assignment declared void, and defended by the assignee.

II. The assignors have been adjudicated bankrupts in the United States district court of this district, and an assignee in bankruptcy appointed, who has commenced a suit in equity against this assignee, to have the assigned property decreed to have vested in him by operation of the bankruptcy acts; that issue has been joined, and a special examiner appointed, who is now taking testimony therein.

III. Numerous judgments obtained against the assignors, are claimed to be liens on the assigned property.

By reason of these matters, the assignee has been delayed in getting in and disposing of the estate.

E. M. Felt (Ruggles & Felt), for the application.

William D. Shipman (Shipman, Barlow, Larocque & Macfarland), opposed.

J. F. DALY.-[After stating foregoing facts.]-There being no evidence that the estate is in danger of being wasted, or that the assignee is not taking good care of

Shipman's Petition.

the trust property, the grounds presented are sufficient to warrant a dismissal of this application by a single creditor of one of the assignees for an accounting. The assignee is in no position to ask for a general accounting, and a special account for the benefit of this petitioner would lead to no result, and cause great expense.

I read the statute as vesting discretionary power in the county judge in compelling an accounting. The section in point (Laws of 1860, chap. 348, § 4, as amended by Laws of 1875, chap. 356, § 2) simply declares that the county judge "shall have power" to issue citation, and compel accounting. Upon good cause shown upon return of the citation, the prayer of the petitioner may and ought to be denied. Where proceedings are pending to test the validity of the assignment, and also to seek to obtain the trust property by an assignee in bankruptcy, and there is no collusion, the accounting should be postponed until a definite result is reached.

Application denied. No costs.

SHIPMAN'S PETITION.

N. Y. Common Pleas; Chambers, February, 1877.

ASSIGNEE FOR BENEFIT OF CREDITORS.-POWERS OF JUDGES. The powers of a county judge,-exercised in the city of New York by the judges of the court of common pleas,-under the act of 1860 and its amendments, relating to assignments for benefit of creditors,―do not extend to directing the assignee in the general administration of the assigned estate, upon his petition presented for that purpose.

An authority to perform acts not authorized by the terms of the

Shipman's Petition.

assignment must be obtained from a court of equity upon suit brought for that purpose.*

Petition by an assignee for the benefit of creditors for the consent of the court or its judges to his uniting in the re-organization of an insolvent railroad company, bonds of which were among the assets of the assigned estate.

William D. Shipman, the assignee under the act of 1860 of the firm of Duncan, Sherman & Co., presented a petition to the court of common pleas of the city and county of New York, and to the several judges thereof, setting forth the possession and ownership by him as such assignee of various bonds of the Mobile and Ohio Railroad Company, a company at the time insolvent, and in the hands of the receivers in certain foreclosure suits of mortgages, by which such bonds were secured; that to avoid such a foreclosure, a plan of re-organization of the company had been prepared, at the instance of various of such bond-holders by whom a committee had been appointed with concurrence of the company, which had been assented to by a majority of the bond-holders; that believing it to be for the best interest of his cestui que trust, the petitioner asked the consent of the court or its judges to unite in such plan of reconstruction, and in the interest of the parties he represented, to accept the benefit thereby offered, by submitting or subjecting the bonds he held, to the terms and provisions of such agreement or plan of re-organization. The application was ex-parte. Shipman, Barlow, Larocque & Macfarland, for the petition.

ROBINSON, J.-[After stating the facts.]-In my opinion, the officers to whom the petition is addressed are not authorized to grant the prayer.

*See Anonymous v. Gelpecke, 5 Hun, 245.

Shipman's Petition.

The act of 1860, chap. 348, and its amendments, relating to insolvent assignments, vest in the judges, but not in the court, certain limited powers; and they relate to the assignee (except in respect to the approval of the securities), and to his accounting, rather than to any control over his administration of the estate. As such judges, except in the matter of such accounting, they possess no judicial powers, except such as exist in the court or a court of equity.

The only power the court possessed upon petition without suit duly instituted is, as a court of equity, under the provisions of the Revised Statutes (1 R. S. 730, §§ 69, 70, 71), to substitute another trustee in place of the assignee.

A receiver, being an officer of the court, may, on petition, at any time apply for advice and direction as to his conduct, and the order of the court would be his justification; but no authority is conferred by any of these acts, either upon a judge of this court acting as county judge (In re Morgan, 56 N. Y. 629), or upon the court to exercise said judicial powers in advising or directing such assignees from time to time in the general administration of the estate upon petition presented for that purpose, which would afford the assignee any indemnity in a departure from the immediate obligation of his trust to sell the assigned property, or enforce collection of debts without any unnecessary delay, so as to convert it into cash for the purpose of distribution (In re Levy's Accounting, 1 Abb. N. C. 177).

The assignee can only find protection for acts not immediately authorized by the terms of the assignment by a resort to the powers of a court of equity, upon suit brought for that purpose.

I am without power to grant the prayer of the petition.

Manning v. Stern.

MANNING v. STERN.

N. Y. Superior Court; Special Term, December, 1876.

INJUNCTION. RECEIVER.—ASSIGNEE For Benefit of CredITORS. Where suspicious transactions between the assignors and assignee were shown, and the latter left the former in possession of the assets and books, and creditors were refused information and access to the books, Held, that pending an action for removal of the assignee, and while he was under injunction, a receiver should be appointed.

An assignee for benefit of creditors should allow the creditors reasonable opportunity to examine the books of the assignor.

Motion in an action brought for the purpose for an order for removal of an assignee for the benefit of creditors; the appointment of a receiver; and to continue an injunction.

Robert Sewell (George H. Fletcher, attorney), for the motion.

Albert Cardozo (James Wiley, attorney), opposed.

VAN VORST, J.-It is of the first importance that the trustee of an insolvent, under an assignment for the benefit of creditors, should be open and candid with the creditors, whose claims are provided for in the instrument, and afford them every reasonable means and opportunity for examining into the affairs of the assignor.

I think the defendant's conduct in regard to the books, and his refusal to allow an examination of them by the creditors, is not such as to inspire confidence in his friendliness to creditors.

The defendant's statement in regard to dealings with the assignors before the assignment, especially in respect to a large amount of property transferred to him by the insolvents, and by him re-transferred to