In re the Assignment of Berman , 160 N.Y.S. 79 ( 1916 )

Soott, J.:

These two orders may conveniently be considered together. On December 1, 1915, Jacob Berman, being indebted to various persons, and among others to the corporation of Austin Nichols Company, made an assignment for the benefit of his creditors to one Albert B. Cory, who is connected with the credit department of said corporation. This assignment is not printed in the record, but no question is made as to its form or validity. The assignor’s assets were small and realized only $400, which was received and, at the time the orders appealed from were made, was still held by the assignee. In January, 1916, the respondent Samuel Mandelbaum was appointed receiver of all the chattels and assets of said Jacob Berman in proceedings supplementary to execution instituted to collect a judgment theretofore obtained against said Berman by a firm doing business as Politziner Brothers.

Cory, the assignee for the benefit of creditors, omitted to record the assignment as required by statute, or give a bond or take the other steps required of such an assignee. Thereupon a motion was made that he be removed as assignee and and that he be required to turn over all the assets collected by him to the receiver in supplementary proceedings. This motion was granted as made, and from the order granting it the assignee appeals.

It is quite apparent that the order, in so far as it directs the assignee to pay over the funds now in his possession to a receiver in supplementary proceedings, is unauthorized and erroneous. By the assignment the title to the assets passed to the assignee, and the fact that he failed to fulfill the requirements of the statute as to things to be done subsequent to the assignment does not render.the assignment itself void or cause the title to the assets to revert to the assignor. Such requirements are merely directory. (Warner v. Jaffray, 96 N. Y. 248, 253; Nicoll v. Spowers, 105 id. 1; Dutchess County Mutual Ins. Co. v. Van Wagonen, 132 id. 398, 402.) It is true that these decisions were rendered under the old “ General Assignment Act,” which has now been superseded by the “Debtor and Creditor Law,” but with regard to the question now under consideration the two statutes are practically identical, so that decisions under the old law are equally applicable to the new. (See Laws of 1877, chap. 466, as amd.; Consol. Laws, chap. 12 [Laws of 1909, chap. 17], as amd.) The failure of the assignee to record the assignment and to give a bond undoubtedly furnished sufficient reason for his removal, if, in the judgment of the court, a simple requirement that the assignment be filed and the bond given would not have sufficiently protected the estate, but if the court decided in its discretion to remove the assignee it was its duty to appoint an assignee or assignees in his place, not to turn the funds over to a receiver for the benefit of a single creditor. (Debtor and Creditor Law, § 8, as amd. by Laws of 1914, chap. 360.) This whole question has now become academic in this case because it appears that Berman, the debtor, has been thrown into bankruptcy. Since the order directing the assignee to turn over the assets to the receiver was unauthorized and contrary to the statute, the assignee was right in resisting its enforcement, and the order punishing him as for a contempt must fall with the order which he refused to comply with.

Both the orders appealed from are, therefore, reversed, with ten dollars costs and disbursements to the appellant in each case, and both motions denied, with ten dollars costs as to each.

Clarke, P. J., McLaughlin, Smith and Page, JJ., concurred.

Orders reversed, with ten dollars costs and disbursements, and motions denied, with ten dollars costs.