In re Devlin & Co.

The order appealed from requires an assignee for the benefit of creditors, having in his possession the proceeds of the sale of the assigned estate, to pay to the landlord of premises occupied by the assignor, prior to the assignment, the rent of the premises during the time that the same were occupied by the assignee after the assignment. The counsel for assignee questions the power of the court to make such an order, insisting that if the landlord has any claim against the assignee, or the assigned estate, he should be compelled to enforce that claim by action, and not in this proceeding. The facts are substantially undisputed. Devlin & Co., a domestic corporation, was the lessee of the premises in question under a lease which expired on May 1,1897. On January 15, 1897, Devlin & Co. executed a general assignment of all its property for the benefit of creditors. Under that general assignment, the assignee was directed to take possession of all the assigned property, to sell the same, and convert it into money, and out of the proceeds to pay and discharge all the just and reasonable expenses, costs, and charges and commissions of executing this assignment. The assignee took possession of the stock of goods of the corporation, situated in the store leased to the assignor, and continued in possession of the store until the same was sold. The goods were all removed from the store on or before March 14, 1897. There is a general allegation that the assignee occupied the premises until May 1, 1897, but that seems to have been denied by the assignee, who swears that all the goods were removed from the store on or before March 14, 1897. Assuming that the assignee was liable for the use and occupation of the premises from the date of the assignment down to and including March 14, 1897, if the appellant had been acting as receiver, there would be no doubt that the court should direct its officer to pay out of the money in his hands the reasonable value for the use of the premises occupied by him; and, in the absence of any other evidence, such reasonable value would be taken to be the amount of rent which the assignor had agreed to pay. People v. National Trust Co., 82 N. Y. 283 . An assignee for the benefit of creditors, however, stands in a somewhat different position before the court than that of a receiver .appointed by the court as its officer to take possession and distribute the property under the general jurisdiction of a court of equity. The authority granted to such assignee depends, not upon his appointment by the court, but upon the act of the assignor, and the assignment under which the title to the property vests in him, by the terms of which he is bound. He is subjected to the general jurisdiction of a court of equity, as a trustee, holding property for the benefit of those interested in it; but such jurisdiction over him is to be exercised in the way in which courts of equity exercise their jurisdiction over trustees or others in the general administration of equity jurisdiction. He is also subject to the provisions of the general act in relation to the assignments of estates of debtors for the benefit of creditors, but the court has no summary jurisdiction over him, as it has over its -own officer, by which, upon motion, he can be directed to dispose of the property in his hands. Except as authorized by the general .assignment act, an assignee for the benefit of creditors has a right

The case of In re Morgan, 99 N. Y. 148 , 1 N. E. 406 , relied on by counsel for the respondents, does not seem to be in point. There it appeared that, upon the settlement of the accounts of the assignee, a sum of .money had been paid to a preferred creditor who was not entitled to receive it, and an application to the court was made to compel such preferred creditor to renav to the assignee such amount. The court of appeals held that the supreme court had power to acquire such repayment by order, citing the provisions of the statute which give to the court the power upon an accounting, and held that the preferred creditor, by accepting the payment of the claim, and those dealing with the assignee, became narties to the assignment; that, upon the general accounting of the assignee, the court had jurisdiction over all matters between the parties to the proceeding in reference thereto. In that case the proceeding for an accounting had been institutéd, and under such proceeding the preferred creditor had been paid a sum of money by the assignee. He was a party to that proceeding for an accounting, and, as such, was subject to the jurisdiction of the court. In this case, however, there has been no accounting. The court" has not obtained jurisdiction over the assignee and all parties interested in the estate which it obtains when a proceeding for such an accounting has been commenced. I know of no greater authority to direct this assignee to pay money due for rent than it would have to require any private individual to pay out of his own estate, or any trustee of an express trust to pay out of the trust estate, the amount which a person claims under a contract, express or implied,

For these reasons I think the order appealed from should be reversed, with $10 costs and disbursements, and the motion denied, with $10 costs, with leave to the landlord to renew the application upon the general accounting of the assignee. All concur.