
    Andrew J. Bates and Jerome E. Bates, Doing Business under the Firm Name and Style of A. J. Bates & Co., Respondents, v. Emma F. Harding, Defendant. Andrew J. Bates and Jerome E. Bates, Doing Business under the Firm Name and Style of A. J. Bates & Co., Respondents, v. Emma F. Harding and Others, Defendants. J. Frank Greene, as Assignee, etc., of Emma F. Harding and of the Firm of Harding & Co., Appellant.
    
      The validity of a general assignment should not he determined upon a motion — stipulation that the liens.óf attaeliments.he transferred from goods to the proceeds thereof. ,
    "Where a stipulation, entered -into between- an assignee for creditors and alleged creditors who have obtained attachments against goods of. their debtor in the hands of such assignee; is made simply t.o save, the expense and loss which would result from a levy upon a stock of goods and the -consequent prevention or' postponement Of a sale thereof by the assignee for creditors, and to transfer the rights of the attaching creditor from the goods to the proceeds of the sale thereof, the rights of the parties must still be determined in an action brought for that purpose, and not by a summary decision upon motion as to such rights, or as to the validity of the assignment.
    Appeal by J. Frank Greene, as assignee, etc., of Emma F. Harding and of tire firm of 'Harding & Co., from an order of the Supreme Court, made at the Kings County Special Term and entered in the office of the clerk of the county of Kings on the loth day of February, 1897, directing a reference in each of the above-entitled actions, and also from an order made at the Kings County Special Term, and entered in the office of the clerk of the county of Kings on the 23d day of March, 1897, denying his motion for a resettlement of such order.
    In the two above-entitled actions the respondents had obtained attachments against the property of the defendants therein and had levied upon moneys deposited in a trust company to the credit of the appellant. Thereupon the parties entered into a stipulation upon which an order was entered directing the trust company to reserve and separate $2,3D0 to the credit of the above-entitled actions and subject to the said stipiilation.
    The determination of the above-entitled actions resulted in two several judgments in favor of the- respondents and against the defendants. Both judgments were entered January 23, 1896, the judgment in the first above-entitled action being for §798.65 and that entered in the second above-entitled action being for §1,254.24.
    
      Alexander 8. Bacon, for the appellant,
    
      Ira Leo Bamberger, for the respondents.
   Goodrich, P. J.:

On December 4, 1895, Emma F. Harding, then doing business on Grand street, Brooklyn, made an assignment for the benefit of creditors to J. Frank Greene, the appellant, and on the same day Emma F. Harding, Robert H. Harding and Abby H. Harding, who carried ■on business on Fulton street, Brooklyn, under the firm name of Harding & Co., made a similar assignment to Greene. The assignee received no assets under the assignment of Mrs. Harding except ten or fifteen dollars. On December twenty-seventh the goods of Harding & Co. were sold by the assignee at auction. On the previous day the First National Bank of Brooklyn commenced an action against Harding & Co., and obtained an attachment under which a levy was made upon the goods. It was agreed between the attorneys for the. bank and for the assignee that the levy should be released in order to permit a sale of the goods, and that the levy should attach to the proceeds which were to be deposited in the Hamilton Trust Company in an amount sufficient to discharge the bank’s judgment. An order was subsequently obtained . directing the trust company to pay the bank’s judgment, and thereupon the assignee commenced an action against -the bank for the conversion of these funds.

On January 2, 1896, these two actions were commenced by A. J. Bates & Co., the one being against Emma F. Harding on a note of $722.17, and the other against the firm of Harding & Co. on a note of $1,165.69, and attachments were issued in each case, but the warrants were never delivered to the sheriff. On January 16, 1897, the attorneys for Bates & Co., the defendants in the two actions, and for the assignee, entered into the following stipulation in the two actions: ■

“ The plaintiffs above named having obtained attachments against the property of the- above-named defendants, and having levied upon moneys now deposited in the Hamilton Trust Company, of Brooklyn, to the credit of J. Frank Greene, as general assignee of defendants, said money having been received from and Upon the sale at auction of the stock of goods of the defendants Harding & Co., and the parties hereto wishing to avoid all possible expense pending litigation to determine the respective claims to said moneys, it is consented that the Hamilton Trust Company reserve and hold said deposit to the amount of $2,300.00 subject to the determination of the above-entitled actions or such other actions as may be instituted to determine the title thereto. Nothing in this stipulation shall be construed to abridge the rights of any of the parties in any actions that may be commenced by' either of them, it being the intent -of this stipulation merely to give to the above-named plaintiffs a lien, under their attachments, upon the said money with the same effect as if -the levy under their said attachments had been made by the sheriff upon the property of the defendants above mentioned.

“ An order may be entered herein directing the Hamilton Trust Company to reserve and separate $2,300.00 to the credit of the above-entitled actions and subject to the stipulation hereinbefore mentioned.”

On January 17, 1897, an ex parte order was obtained by the attorneys of Bates & Co. directing the trust company, out of the moneys deposited with it to the credit of the assignee, to forthwith separate $2,300 to the credit of the above actions and subject to the stipulation aforesaid; and on the same day an order was obtained directing the assignee and the trust company to show cause why the company should not pay'out of the specified moneys deposited with it for that purpose the judgments in these actions, and why the sheriff should not levy the executions upon such' moneys.

The judgments in these actions were not entered until the twenty-third of January, and on January thirtieth, after hearing counsel for both parties, an order was entered' that the moneys deposited in the trust company were applicable- to the payment of the judgments, “ only in the event of the general assignments made by the above-named defendants on December 4th, 1895, to J. Frank Greene, being declared and adjudged to have been made for the purpose of hindering, delaying and defrauding creditors, in which event the moneys deposited in the Hamilton Trust Company shall and will be applied to the payment of the said judgments and each of them,” and referring the matter .to a referee to take proof and -report to the court whether the general assignments were made for the purpose of hindering, delaying and defrauding creditors. It is from this last order that the present appeal is taken.

We think the fair construction of this stipulation is, that the parties intended thereby to save the expense and loss which would result from a levy upon the stock of goods and consequent prevention" or postponement of the sale, and to have the rights of the plaintiffs, if they had any, transferred from, the goods to the fund resulting from their sale, and not to pass finally upon and decide the rights of the parties; that there should be a subsequent action to determine their rights, until which time the money was to remain in the hands of the trust company, and that the stipulation did not contemplate a summary disposition of the rights of the parties upon a motion of this character.

• ■ "Another substantial. objection to the stipulation arises from the fact that the effect of it, as claimed "by Bates & Go., would be to apply'the property of Harding & Co., or its assignee, to "the payment" of .the" judgment -against Mrs.- Harding, the absurdity of which is "apparent from the statement. Tlie only property received by the ¡assignee from the estate- of. Mrs. -Harding was ten dr. fifteen dollars,' .yet'the "effect of the arrangement, if carried out, would" he to pay a debt of- Mrs. Harding’s, with the property of. Harding & Co.

• Still another objection arises from the fact that, the validity of the assignment cannot he summarily disposed- of upon a motion of this character. The creditors have the' right, through' the assignee, to. contest, in'-an action instituted for that purpose, the question of .the " validity of the assignment, and whether, it was made with intent to- . hinder, delay and defraud creditors, but this question cannot he litigated in the present action.

.. It is not necessary to express an opinion as to the" power of the court to "order a compulsory reference under .section 1015. of the. Civil Code.

The-orders must be. reversed, with ten dollars costs and. disbursements-in each action." L" :

All concurred.:

v Orders reversed, with ten dollars costs and disbursements "in-each action,-". " ■  