p. 112In the Matter of the General Assignment of Robert H. Merriam to Frank H. Sigerson, for the Benefit of his Creditors. William W. Davis, Substituted Assignee, Respondent; James B. Ludlow, Appellant.Headnote
General assignment for creditors — an attorney, who has loaned money to the assignor, upon security, for himself and for his clients, may be compelled to testify in order to enable the assignee to males an inventory.An application, made under the General Assignment Act (Laws of 1877, chap. 466, § 21), by a substituted general assignee, to examine (in order to enable the assignee to make an inventory) an attorney who is alleged to hold property of ' the assignor,’ and whose opposing affidavit shows that he has loaned money to the assignor for-which he holds security, will not be denied merely because the attorney also states that he was concerned in other loans made by certain of his ■ clients to the assignor, as the attorney may properly be examined in regard to his individual transactions, and the court can sufficiently protect him from being compelled to disclose any privileged communications made to him by his clients in regard to their loans.
Appeal -by James B. Ludlow from an order of the Supreme Court, made at the Mew York Special Term and entered in the office of the clerk of the county of Mew York on the 20th day of December, 1897, requiring James B.. Ludlow to appear before a referee to be examined as a witness under section 21 of the General, Assignment Act (Chap. 466 of the Laws of 1877).
Lewis L. Delafield, for the appellant.
Ralph S. Rounds, for the respondent.
The substituted assignee presented a petition to the Supreme Court stating that the assignor had wholly omitted and neglected .to make and deliver an -inventory of his assigned estate and a schedule of his’creditors, as required by statute, and that, in order to enable the assignee to prepare such inventory and schedules, it was necessary to examine certain persons who held property, of the assignor and asked for an order for the examination of the persons named in the petition under section 21 of the- General Assignment Act (Chap. 466, Laws of 1877). The appellant, Mr. James B.
p. 113Ludlow, one of the persons whose examination was desired in answer to such application, submitted an affidavit in which he stated, that the information which he had obtained in regard to the estate of the assignor was information which had been acquired by him as attorney for the assignor and others, stating, however, that prior to the assignment “ clients of my own made loans, amounting in the aggregate to a considerable sum of money to the said Robert H. Merriam; and I personally loaned him some moneys. All of these loans were made on a definite understanding in each case as to the security to be given therefor. These loans have not been repaid, but I personally hold certain security for the same; and I hold the greater part of this security by direct assignment to me from Helen L. Merriam, of St. Paul, Minn., the said R. H. Merriam’s mother. The said R. H. Merriam is also indebted to me for more than' ' $5,000 for professional services, consultations, etc., as well as for about $150 for actual disbursements incurred by me in his behalf and not yet repaid to me.” Upon this petition and the affidavits submitted an order was made by one of the justices of the Supreme Court requiring James B. Ludlow to appear before one of the justices of the court and submit to an examination on oath, then and there to discióse all knowledge and information he may possess ■ necessary to the.proper making, as required by law, of an inventory and schedules of the estate assigned by the said . Robert H. Merriam to Frank H. Sigerson, and requiring the said James B. Ludlow to. produce before the said justice all books and papers in his possession or under his control containing any entries or memoranda as to any of the matters, and especially any and . all written agreements or deeds of trust in regard to any collateral security given to secure any indebtedness of the said Merriam. Mr. Ludlow appeals from this order and insists that the facts about which he could testify were received by him as the attorney for Merriam- and others who had loaned money to Merriam. Mr. Ludlow’s affidavit, however, expressly states that he has personally loaned money to his assignor and has in his possession property as security for such loans. As to the property of the assignor that he has in his possession as security for loans made by. him to the assignor, it would seem that he could be examined as a witness, and as to his arrangements with
p. 114-the assignor, under which he loaned money -to him and received yiroperty from him as security for loans to the assignor, or to secure the payment of sums due by the assignor, lie should testify.
There would be no difficulty upon the examination in fully protecting the witness so that he would not be required to disclose communications to or information received by him in a professional capacity, and such questions should be reserved until the examination. The order for his examination upon the papers submitted was, therefore, proper.
The appellant claims that the. order is too broad, in that it directs him to disclose all knowledge and information he may possess necessary to the proper making of the inventory and schedules and as to any property rights and interests belonging to said Merriam. Any examination ordered under this section, although general in terms, would be necessarily subject to the right of the witness to'object to making any disclosure of information received by him as professional adviser of either the assignor or any other person who consulted him professionally, and that was the view; of the justice below, as in his memorandum deciding the application he expressly stated that all questions of privilege should be decided by the justice before whom the examination, takes place.
The order appealed from should be affirmed, with ten dollars ■costs and disbursements.
Yan Brunt, P. J., Barrett, Rumset and McLaughlin, JJ., concurred.
Order affirmed, with ten dollars, costs and disbursements.-