
    In the Matter of the Assignment of Simon Rindskopf et al. to Jacob W. Mack for the Benefit of Creditors.
    [Special Term],
    (Decided January 6th, 1885).
    An examination under the General Assignment Act, of the books of assignors, should not extend to an inquiry as to whether preferences in the assignment are fraudulent, or whether the assignors, either in making the assignment or in anterior transactions, did any act that was fraudulent. An examination, the object of which is to discover evidence that may be used in an action to set aside the assignment as fraudulent, cannot be had under the General Assignment Act.
    Application for an order for the examination of the books of assignors in a general assignment for the benefit of creditors.
    
      ■ The facts are stated in the opinion.
   Van Hoesen, J.

The order for the examination should be modified so as to provide that the examination of the books shall be under the control of a referee, and that the assignee or his representative may be present.

The examination should not extend to an inquiry as to whether the preferences are fraudulent, or as to whether the assignors, either in making the assignment or in transactions anterior to the assignment, did any act that was fraudulent in fact, or fraudulent in contemplation of law: No

inquiry as to what the assignors, prior to the assignment, did with borrowed money, or with their own property, should be permitted. Of course, their transactions subsequent to the assignment are not subjects of this examination.

There may be an examination as to the amount of property embraced in the assignment. There may also be an examination as to the amount of debts that appear on the books to be payable out of the assigned estate; but the referee should not permit the petitioners, under the pretense that they are ascertaining the amount of debts appearing on the books, to pursue an inquiry as to whether the book entries are fictitious, or whether the assignors were actually indebted to the amounts that appear on the books as claims against them.

As has been said before, an examination whose object is to discover evidence that may be used in an action (either already begun or merely in contemplation) to set aside the assignment as fraudulent, must be had under the Code of Civil Procedure, and not under the General Assignment Act.

Order accordingly.  