Faxon v. Mason — 70 N.Y. St. Rep. 624

Majority

p. 624

Edith Mason Faxon, Resp’t, v. John Mason et al., App’lts.

(Supreme Court, General Term, First Department,

Filed November 15, 1895.)

Headnote

1. Appeal—Party agrieved.

Upon the setting aside of a fraudulent assignment, the assignor cannot object to an order directing the payment of the money, which is the proceeds of the property assigned, by the receiver, on the ground that it provides for the commitment of the receiver for contempt upon his failure so to do.

3. Assignment for benefit of creditors—Counsel fees.

A fraudulent assignor cannot effectually insist that his innocent assignee shall be deprived of disbursements incurred in good faith, in the performance of his duty under the assignment.

3. Same.

In such a case, the assignor may attack the allowance to the assignee for disbursements for attorney fees, as excessive, though plaintiff, who was entitled to have all the property assigned applied on his judgment against the assignor, consented to the allowance.

4. Same—Attorney fees.

An allowance to an assignee for attorney fees,, based on the uncontradicted affidavit of the attorney rendering the services as to their value, will not be set aside as excessive.

Appeal from an order directing the receiver to pay over . moneys in his hands.

Franklin Bien, for app’lt; Howard A. Taylor, for resp’t Faxon; Henry A. Forster] for- resp’t Ball.

The appellant, Mason, made a"general assignment for the benefit of his creditors to the defendant Ball, June 21, 1892. Subsequently this action was brought to set aside the assignment, on the ground that it was fraudulent and void as against creditors, and it resulted in a judgment in favor of the plaintiff, by which judgment a receiver was appointed, to whom the assignee, Ball, was directed to pay over the moneys in his hands, amounting to $26,234.85. Thereafter such judgment was affirmed by the general term of this court, and later the plaintiff moved the' court that the receiver pay over to her the moneys in his hands. It resulted in an order that the receiver retain his commissions and disbursements, which were fixed at the sum of $1,348.81; that he pay to the assignee or his attorneys the sum of $3,000; and that he pay over the balance, amounting to $22,239.46,

p. 625

to the plaintiff. From that order the defendant Mason, who was the assignor in the assignment which was set aside by the j udginent, alone appeals.

He objects to so much of the order as provides “ that, in case nny of the payments be not made as herein directed after personal demand, a warrant of commitment issue, pursuant to section 2268 ■of the Code of Civil Procedure.” We cannot see that he is in a position to attack this provision of the order, for he is not affected by it in any way. The receiver, against whom this part of the order was directed, would, undoubtedly, have had the right to call it in question, and to have insisted that, before the court could make any adjudication whatever in the matter of contempt, a demand should be made upon him to pay over the money directed by the order of the court to be paid. But the receiver does not appeal, and, as none of the other parties are aggrieved, they have no standing to call it in question.

His next objection is that, the assignment having been set aside, the assignee was not entitled to the disbursements incurred for counsel fees made by him after the action was brought to set aside the general assignment, and therefore that part of die order directing the payment of $3,000 to the assignee or his attorneys was error. This position the plaintiff could, perhaps, have successfully taken, in view of the authorities which hold that a successful creditor, in an action to set aside an assignment on the ground of fraud, obtains a lien on the whole fund in the assignee’s hands, which is superior to the assignee’s claim for compensation. Dorney v. Thacher, 76 Hun, 361 ; 59 St. Rep. 443 ; Dexter v. Adler, 76 Hun, 439 ; Mayer v. Hazard, 49 id. 222; 17 St. Rep. 26 . But the plaintiff, instead of making objection, consented to it, and the question which the appellant presents, therefore, is whether the fraudulent assignor can effectually insist that his innocent assignee shall be deprived of disbursements incurred, in good faith, in the performance of his duty under the assignment. This question must be answered in the negative; for, while the assignment may be fraudulent and void as against creditors, it is good as against the assignor, and the good-faith assignee, who accepts and undertakes the execution of the trust created by the assignment, is entitled to protection as against the assignor.

Whether there was sufficieút evidence before the court to justify that portion of the order which fixed the amount of his disbursements at $3,000 constitutes the remaining question. The position of the respondent Ball that because the plaintiff would have been entitled to receive, under her judgment, such portion of the amount as should not have been awarded to the assignee, therefore her consent deprived the assignor, Mason, of any standing to make objection, is not well taken. Mason was entitled to have every dollar used in reduction of the plaintiff’s judgment which was properly applicable thereto, to the end that his liability thereon should be, to such extent, reduced. His claim ■of right to resist an improper allowance to the assignee for disbursements is therefore well grounded. As a basis for an adju

p. 626

dication by the court upon the question of disbursements, there was presented the affidavit of the assignee, Ball, giving a detailed account of the progress of the litigation to which he was a party, together with the affidavit of one 'of his attorneys, reciting the character and extent of the work performed by them as counsel to the assignee, the value of their services, and the amount which they had received from the assignee on account. The assignor, Mason, appeared by his attorney, who also filed an affidavit made by himself, but he did not therein question the value of the services of the counsel for the assignee. Nor does it appear from this record that any evidence whatever was offered by Mason or his attorney challenging the affidavit of Ball’s counsel as to value. In view, therefore, of the evidence before the court on the motion touching the subject of compensation of counsel, it was fully justified in fixing the amount at $3,000.

The order should be affirmed, with $10 costs, and printing disbursements.

All concur.