In re the Assignment of Ginsberg

On tbe removal of an assignee for the benefit of creditors a substitute was appointed, and to this successor the assignee was directed to deliver the fund in his possession, and enjoined from otherwise disposing of it. The order provided also that the deposed assignee should account. Meanwhile, however, in several suits by different creditors, in the superor court, judgments had been entered vacating the assignment as fraudulent and void ; appointing a receiver of all the assigned property and requiring the assignee to turn it over to him, and naming a. referee to audit the accounts of the assignee.

The referee reports a considerable sum in the hands of the .assignee ; and this sum specifically he is adjudged by final decree in the superior court to pay to the receiver.

Under the pressure of these contradictory requirements, the assignee petitions the court to vacate the order removing him, in so far as it directs him to deliver the estate to his successor, enjoins him from interfering with it, and compels him to account.

The principle is fundamental in the jurisprudence of this country, and indispensable in the administration of justice, that “ where the jurisdiction of a court, and the right of a plaintiff to prosecute his suit in it, have once attached, that right cannot be arrested or taken away by proceedings in another court. * * * Neither can one take property from the possession of the other by replevin or other process ; for this would produce a conflict extremely embarrassing to the administration of justice.” Peek v. Jenness, 7 How., U. S. 618, 624-5.

This principle — that the tribunal first acquiring jurisdiction shall retain it — has been applied to determine the inconsistent pretensions of creditors by judgment and the administrator of an estate in a court of insolvency, in a controversy between trustees in chancery, and judgment creditors seeking remedy by executory process, and in other instances of clashing contentions between concurrent judicatories. Taylor v. Carryl, 20 How., U. S. 583, 596-7; Williams v. Benedict, 8 id. 107; Schuehle v. Reiman, 86 N. Y. 270 .

When the suits in the superior court were instituted the court of common pleas already had jurisdiction of Ginsberg’s assignment, of the accounting by his assignee and of the distribution of his estate among creditors.

True, the judgments in the superior court have conclusively established the invalidity of the assignments as to the creditors impeaching it, Hammond v. Hudson River I. & M. Co., 20 Barb. 378 , 381; but. no farther, and it still stands as to all other creditors. Bishop on Assignments, 228. The effect of the judgments invalidating the assignment is not enlarged by the fact that the suits which issued in the judgments purported to be in behalf of all other creditors who should come in, because the plaintiffs.in those suits could renounce .the benefit of the assignment only for themselves, and the creditors opposing this motion expressly elect to confirm it.

. The assignment proceeding, therefore, still remains in the court of common pleas, with all the incidents of such proceeding, in-

But, the assignment being void as to the creditors who have-succeeded in impeaching it, tney have a right, as against creditors claiming under the assignment, to the satisfaction of their judgments out of the fund in the hands of the assignee. As to so much of that fund as is requisjte to satisfy those judgments, the assignee holds it wrongfully, and not by virtue of the assignment. He must, therefore, pay over to the -receiver in the superior court the aggregate amount of those judgments, if so much be in his hands; and if not, then whatever he holds.

The accounting of the assignee in this court will proceed to a conclusion; and if he be found in default the surety may be prosecuted upon his' bond, but only for the benefit of creditors claiming under the assignment. Creditors repudiating the assignment can of course take nothing by virtue of the assignment. Not being beneficiaries of the trust, they cannot be damnified by i.ts maladministration.

An order pursuant to this opinion will be entered, on notice.