« AnteriorContinuar »
Fourth Department, March, 1910. to a person other than the real creditor and, therefore, was not discharged.
Graber v. Gault (103 App. Div. 511) is much relied upon by the appellants as holding that the burden of proof was upon the respondent instead of the appellants. That was a motion under section 1268 of the Code of Civil Procedure for the discharge of record of a judgment against a bankrupt, and the court on appeal held the motion was improperly granted by the court below because the moving party did not show by evidence outside the discharge that the debt was not one excepted, in that it was duly scheduled, and the creditor had notice or actual knowledge of the bankruptcy. I do not think that a well-considered decision. None of the cases holding a contrary doctrine were called to the attention of the court. No case in this State was cited as authority for the rule except Columbia Bank v. Birkett (supra), which as I have said did not pass upon any such question, and moreover precisely the contrary doctrine was expressly stated in the same Appellate Division in the subsequent case of New York Inst. for Instruction of D. & D. v. Crockett (supra). I quote the language as follows: “ The United States District Court is a court of record, and on proof of the order discharging the bankrupt the presumption would arise that the court obtained jurisdiction and that its proceedings were had in conformity to law; but we are not required to rest on this presumption, for a certified copy of the order granting the discharge was presented on the motion, and by virtue of the provisions of subdivision f of section 21 of the Bankruptcy Act, that is declared to be “evidence of the jurisdiction of the court, the regularity of the proceedings, and of the fact that the order was made. It must, therefore, be presumed that the plaintiff had notice of the bankruptcy proceedings and that its judgment * * * was scheduled as one of the debts from which he would seek a discharge.” And this was a unanimous decision of the court. A certified copy of the order for a discharge was presented to the Surrogate's Court in this case.
I have no hesitancy in holding that the surrogate properly held the judgments were discharged. If the appellants claimed their debts were excepted because not properly scheduled, and they had no notice or knowledge of the bankruptcy proceedings, they had the burden of showing the facts upon which their claim rested, and
Fourth Department, March, 1910.
[Vol. 137. very likely if a controversy arose on these facts the surrogate would have had no jurisdiction to determine whether the judgments were discharged.
Third. The claim that it should have been shown that the judgments were discharged on application to the State courts, pursuant to section 1268 of the Code of Civil Procedure, is not well made. The effect of an order on such a proceeding is not to discharge the judgment for that is already accomplished by the order in the bankruptcy proceedings. Its object is to remove a cloud from the record and procure the cancellation of the judgment on the record. (Pickert v. Eaton, 81 App. Div. 423; Graber v. Gault, supra.)
The decree should be affirmed.
ADELBERT D. CRONK, Respondent, v. MARGARET I. CRANDALL,
Individually and as Surviving Partner of the Firm of CRANDALL & Co., Respondent, Impleaded with CLAYTON G. Landis and JOSEPH D. CARROLL, as Executors, etc., of John B. Doerr, Deceased, and Others, and HARRIET E. Fiss, as Administratrix, etc., of WILLIAM Fiss, Deceased, Appellants.
Fourth Department, March 9, 1910.
Partnership - accounting - suit by assignee of legatee of deceased part
ner — procedure — failure to file accounts — waiver - evidence – books of firm - marshaling assets - return of advances made by partners — costs.
Although the assignee of the legatee of a deceased partner has no legal title to
the assets of the firm, he has an equitable interest which entitles him to sue
the surviving partners for an accounting. Moreover, any objection to the right of such assignee to sue is waived where the
defendants agreed on a hearing before the referee that the issues, which are also involved in pending actions, be tried on the reference in order to save
expense. On a partnership accounting the defendant should make and file a verified account so that the plaintiff may file objections and surcharge the same, but a failure to file such account is waived where the parties proceed to trial without objection.
Fourth Department, March, 1910. On a partnership accounting the books of the partnership are competent, but not
conclusive evidence. On a partnership accounting any sum advanced by a partner beyond his propor.
tionate contribution to the capital should be repaid from the surplus before a
division thereof. Where the plaintiff in a partnership accounting is entitled to costs there is no
authority for making allowances to other parties. McLENNAN, P. J., dissented.
SEPARATE APPEALS by the defendants Clayton G. Landis and another, as executors, etc., and others, and by the defendant Harriet E. Fiss, as administratrix, etc., from a judginent of the Supreme Court in favor of the plaintiff and the defendant Margaret I. Crandall, entered in the office of the clerk of the county of Erie on the 7th day of January, 1909, upon the report of a referee.
August Becker, for the appellant Harriet E. Fiss, as administratrix.
H. De Wight Luce, for the appellants Landis and others.
Irving W. Cole, for the respondents. KRUSE, J.:
This action involves a partnership accounting. Crandall & Co. was a partnership firm doing business in the city of Buffalo. On the 14th day of February, 1894, it was composed of Adelbert D. Cronk, the plaintiff, Margaret I. Crandall, William Fiss and John B. Doerr, each owning an undivided one-fourth interest in the firm property. On or abont December 31, 1898, Fiss and Doerr purchased Cronk's interest, so that they (Fiss and Doerr) each then had a three eighths interest in the firm. On the 26th day of July, 1901, Doerr died, leaving a last will and testament, in which Fiss was named as one of the executors. The will was admitted to probate and Fiss qualified and acted as executor with two of his associates.
When said firm was dissolved by the death of Doerr, the assets consisted of book accounts, a leasehold of certain premises, sales stables and other property which was afterwards sold and converted into cash by the surviving partners, Fiss and Crandall. Fiss had the actual possession, management and control of the copartnership assets and affairs up to the time of his death, which occurred April 21, 1908.
Fourth Department, March, 1910.
[Vol. 137. Doerr willed all of his property to his widow, Mary A. Doerr, his daughter, Estella Landis, and his son, William F. H. Doerr, except that he made a bequest of $10,000 to a grandson, which has been paid as well as all of his debts and liabilities which have been presented for payment.
After the death of Doerr and on November 4, 1901, his widow and daughter assigned to the son all of their right, title and interest in the firm and assets; and afterwards, and on the 12th day of November, 1901, the son, in consideration of the sum of $6,500 paid to him by the plaintiff, conveyed in terms to the plaintiff all his right and interest in and to the assets and property of the firm, except the book accounts; and on the 11th day of December, 1901, the said Mary A. Doerr, the widow, Estella Landis, the daughter, and William F. H. Doerr, the son, made, executed and delivered to the plaintiff a writing, under seal, whereby they agreed to indemnify and hold harmless the plaintiff from any debts of said firm or of the said John B. Doerr, the deceased, or his estate, and agreed to protect from any such debts the said interests, so sold and transferred by the son to the plaintiff.
Fiss died before the case was decided, but after the evidence had been taken, and the administratrix of his estate was thereafter substitnted in his place.
The referee finds that the proceeds from the assets, outside of the book accounts, amount to $27,882.77; that there was realized from the accounts receivable the sum of $28,736.01; that the liabilities of the firm at the time of the decision were $33,647.17; that the survivors had disbursed from the amounts which they had received for the expenses the sum of $3,944.61, leaving in their hands to be distributed the sum of $19,027, of which $18,789 was in the hands of Doerr at the time of his death ; and the remaining sum of $229, less $21, came into the hands of the defendant Crandall, and is still retained by her; and that she has drawn out of the firm since the death of Doerr the sum of $1,734.83.
The referee decided that of the $19,027 the plaintiff is entitled to three-eighths; the defendant Crandall to two-eighths, less $1,734.83, received by her since the death of Doerr, and also less said $229, so as aforesaid found in her hands; and that the administratrix of the estate of Fiss is entitled to the remaining three
Fourth Department, March, 1910. eighths, all subject, however, to the costs and expenses of the accounting
The referee further decided that the plaintiff is entitled to recover, and directed personal judgment against the widow, son and daughter of Doerr, the deceased, under their contract of indemnity for the difference between the sum of $10,456.04, being three-eighths of $27,882.77, the amount realized from the assets of the firm outside of the book accounts and the sum which the plaintiff would receive as his portion of the net assets of the firm, the amount of which was ascertained to be, and personal judgment was entered for, the sum of $4,253.22. Certain allowances for costs were also made to the respective parties, some of which are challenged on this appeal.
The administratrix of William Fiss and the executors of Doerr's will, as well as his widow, son and daughter, appeal from the judg. ment, urging various grounds for the reversal thereof.
On behalf of the appellants, the personal representatives of Doerr, the deceased, it is contended that the plaintiff is not entitled to maintain the action; that he acquired no legal title to the assets of the firm under the assignment. That may be true, but I think he has such an equitable interest therein as to entitle him to have an accounting by the surviving partners. (Blood v. Kane, 130 N. Y. 514; Fleischmann v. Fleischmann, 54 App. Div. 202.)
However, a complete answer to that objection is that it was expressly waived on the trial of the action, not only by these appellants, but by all of the defendants. Counsel for the appellants, who now raises the question, stated that in view of the fact that there were other actions pending, involving the same issues, they might as well be threshed out in this case; that it would save expense to all parties. This took place at almost the beginning of the hearing before the referee, and the trial thereafter proceeded along the broad lines of adjusting all of the equities between the parties. I think the appellants cannot now successfully urge that objection.
It is also contended by said appellants that the defendant Fiss should have made and filed a verified account, giving the opposing parties an opportunity to file objections and surcharges. Undoubtedly that would have been the more orderly course, and could have been required if insisted upon. (Kliger v. Rosenfeld, 120 App.