
    Hynes v. Campbell et al.
    
    
      (Supreme Court, General Term, Second Department.
    
    July 2, 1891.)
    1. Assignment for Benefit of Creditors—Liability of Assignee.
    After the execution of a preferential assignment a composition agreement was entered into, by which the unpreferred creditors of the assignor agreed to accept 20 per cent, of their debts in full satisfaction. The assignee then sold the property to the assignor for- $8,600, a sum sufficient to pay all the debts under the composition agreement. The purchaser paid in cash $2,500, which the assignee applied to unpreferred debts and expenses. Afterwards the purchaser refused to complete the purchase. Held, that the assignee would be required to account to the preferred creditors for the sum so received.
    
      2. Same—Allowance to Assignee.
    In such case, the assignee was properly allowed S75 costs and his disbursements-out of the fund received by him; there being no evidence of bad faith on his part, and the expenses being incurred after the filing of his account.
    Appeal from special term, Kings county.
    Action by Michael J. Hynes, who sues as well for himself as for others similarly situated, against William A. Campbell and Daniel Van Winkle, to require an accounting by said Campbell as assignee under an assignment made by Van Winkle for the benefit of his creditors. Plaintiff Hynes died pending the action, and Margaret Hynes and Henry H. Bowers, as administrators, were substituted as plaintiffs. Plaintiff appeals from so much of the order as allowed the assignee @75 costs and $439 disbursements expended since the filing of the account, and to be expended. Defendant Campbell appeals from so much of the order as requires him to account to the preferred creditors for the money received by him on the sale of the assignor’s estate, and applied by him to the unpreferred creditors under an agreement with the purchaser.
    Argued before Barnard, P. J., and Dykman, J.
    
      Hascall, Clarke & Vanderpoel, for plaintiff. William R. Barricklo, for defendants.
   Barnard, P. J.

The plaintiff is a judgment creditor of the defendant Daniel Van Winkle. He is also a preferred creditor under the assignment made by Van Winkle to the defendant Campbell. Soon after the assignment a composition deed was entered into whereby certain of the unpreferred creditors agreed to accept 20 cents in satisfaction of their debts. This agreement included nearly all the unpreferred debts of Campbell. The stock and business of the assignor was such that the firm of Karst & Costello wished to form a company and buy it in gross for a sum sufficient to pay all the debts under this composition. The amount was fixed at $8,500. Karst & Costello paid $2,500 in cash to Campbell with which to pay the unpreferred debts, which he did so far as the same would go, and which sum nearly paid up the unpreferred claims against Campbell. The balance of the $2,500 was used for the estate expenses. Karst & Costello then refused to carry out the agreement. The property was not delivered, and the $2,500 was not returned. Karst & Costello were not among the Creditors of Campbell, but were to be interested in the company to be formed. The assignee is liable to account for this $2,500. It was an executory sale of the stock to Karst & Costello. It is true, it was based upon an expectation that the company’s scheme would have been carried out, but it was a receipt of part payment for the sale. The motive which led the firm to require, the payment of the unpreferred creditors with this part payment has no relevancy. The assignor was bound to execute the assignment, and, if he paid unpreferred debts before the balance of the $8,500 was paid, he did so at his own risk. The $2,500 belonged to the trust-estate, and the referee properly held it to be assets. The judgment should be affirmed, with costs.

Barnard, P. J.

The plaintiff is a judgment creditor of Daniel Van Winkle, one of the defendants. Van Winkle assigned to William A. Campbell, the other defendant, for the benefit of his creditors. The plaintiff was a preferred creditor in the order of distribution under the assignment. This action is brought by the plaintiff for himself and others similarly situated for an accounting. A decree has been entered, and an appeaLis brought by each party. The plaintiff appeals from that part of the judgment which gives $75 costs to assignee, and which allows him his disbursements. The general rule is that all necessary costs and disbursements are chargeable to the trust fund. The amount allowed to the assignee was a moderate sum, and the expenses were all incurred after the account was filed. There was no evidence of bad faith upon the part of the assignee, even in the particular case where he was decreed to be wrong, so as to make it proper to put the costs upon him personally. Code, § 3246. The part of the judgment affected by the plaintiff’s appeal should be affirmed, with costs.  