In the Matter of the General Assignment of John L. Kimberly to Roland Crangle for the Benefit of his Creditors. Roland Crangle, as Assignee, Appellant; John J. Lynch, Respondent

In the Matter of the General Assignment of John L. Kimberly to Roland Crangle for the Benefit of his Creditors. Roland Crangle, as Assignee, Appellant; John J. Lynch, Respondent. Services for cartage rendered to an assignor which do not give the claimant a preference in the payment therefor by the assignee for creditors. A claim for services rendered to an assignor for the benefit of creditors in trucking and carting merchandise between August 1, 1897, and December 81, 1897 (subsequent to the enactment of chapter 634 of the Laws of 1897, amending section 39 of chapter 466 of the Laws of 1877), is not entitled to a preferential payment out of the assets of the assignor in the hands of the assignee, where it does not appear that the personal services of the claimant entered into and constituted the foundation for the principal part of the claim or that the claimant was exclusively in the service of the assignor, but, on the contrary, that he was carrying on a general business and incidentally, by means of teams and men, transacting business as a carrier for the assignor. Appeal by Roland Crangle, as assignee for the benefit of creditors of John L. Kimberly, from a judgment of the County Court of Erie county in favor of John J. Lynch, entered in the office of the clerk of the county of Erie on the 2d day of August, 1898, upon the report of a referee, adjudging the claim of John J. Lynch to be entitled to a preference under the General Assignment Act. In May, 1898, John J. Lynch presented a petition to the County Court of Erie county, in which it was stated that theretofore John L. Kimberly had been doing business in the city of Buffalo, and that on the 31st of December, 1897, he made an assignment to Roland Crangle for the benefit of his creditors, which was filed in Erie county clerk’s office. The petitioner stated that he “ did and performed services for the said John L. Kimberly as a cartman and truckman of merchandise from August, 1897, up to the time of making such assignment, and that said claim, as your petitioner is informed and believes, is a preferred claim under the statute of this State to the amount of $569.47.” That ■ the claim had been presented to the assignee and was rejected by him as a preferred claim. The parties, bn the thirty-first of May, appeared before the County Court and a referee was named “ to hear and determine ” the claim. The referee, on the 30th of Íuly, 1898, made a report; awarding to the claimant $569.47, and in his report, stated as a conclusion of law, viz.: “ That the said claim of John J. Lynch for wages, for his work as cartman and truckman for the said John L. Kimberly from August 1st to December 31st, 1897, is a preferred claim under the General Assignment Law of the State of Hew York, and as such is entitled to be paid ratably with the wages and salaries of other employees of the said John L. Kimberly, and judgment is hereby directed establishing the said claim of the claimant, John J. Lynch, as a preferred claim to share ratably with other employees in the distribution of the assets in the hands of the assignee, with costs and disbursements, which are hereby directed to. be taxed.” Exceptions were filed to the referee’s report. Judgment was entered thereon on the 2d of August, 1898, and on the fifteenth of August the assignee appealed to this court. Thomas C. Burke, for the appellant assignee. Nathaniel W. Norton, for the respondent Lynch. George J. Sicard, for Merchants’ Bank of Buffalo. [MAJORITY — Hardin, P. J. :] Hardin, P. J. : Upon the hearing before the referee the claimant testified that he had an account against the assignor commencing on the 2d day of August, 1897, “ and continues through the months of August, September, October, Hovember and December, from day to day, up to the 31st day of December, 1897. It is all for carting during that time. I have charged the prices agreed on between Mr. Kimberly and myself. * * * I have been doing carting for Mr. Kimberly between fourteen and fifteen years, and I was paid in full for all of my services as a cartman up to the 2d day of August, 1897.” In the course of his cross-examination he said : “ My business is general; I do carting for any one who employs me, and during fifteen years I have been doing carting for Mr. Kimberly. I employ men in my business to cart for me. I keep hired men. They do what is called my teaming and carting for me, in my employ. I do not do all the work myself. I pay these men in different ways, by the day, week and month. I have some men whom I pay in eacli way. If I have a great deal of work I hire men by the day. I render my bills to the parties for whom I do work when the work is done. In Mr. Kimberly’s case I was in the habit of rendering a monthly statement to him showing the items of work done.” Kimberly was sworn, and he testified that the claimant “ did my ■carting for my pickle and vinegar works on Fourth street, in Buffalo. The method of doing business with Mr. Lynch was as follows: He charged us 35 cents a load, five barrels constituting a load, to ■certain points, the Hew York Central, the Delaware and Lackawanna and the Lehigh Valley depots, and he charged us 40 cents a load to the Lake Shore depot and outer points. Mr. Lynch would make out his bill the first of every month for the previous month. I would credit liis account with whatever it was.” The witness further stated that he saw the teams that came there between August 2, 1897, and December 31, 1897, for merchandise that was hauled, ■and he added : “ In each case, in which I remember, Mr. Lynch was not the driver of the team. I cannot say positively whether he has -driven the teams sometimes since the second day of August, 1898, but I think not. All the hauling for which this claim is made was ■done between those dates. * * * I did not see Mr. Lynch drive the teams personally. * * * Very often 1 saw others drive the teams for which some of this claim is made.” In the proof of claim submitted there was a statement of the •amount due for labor and services in carting for the months of August, $92.22; September, $116.66; October, $150.63; Hovember, $145.96, and December, $64; total, $569.47. Bv chapter 266 of the Laws of 1897, passed April fifteenth, the Legislature amended section 29 of the act in relation to assignments ■(Chap. 466, Laws of 1877), and provided in the closing words of the ■section, as amended, viz.: “ All sums due to truckmen or cartmen for the payment of freight, and for the carriage of goods, wares and merchandise, shall be deemed and treated as wages for the purposes ■of this act.” It was provided that that act should take effect immediately. On the 19th of May, 1897 (Chap. 624), the same Legislature again •amended section 29, and provided that it should read as follows: In all distribution of assets under all assignments, made in pursuance of this act, the wages or salaries actually owing to the-employes of the assignor or assignors at the time of the execution of the assignment for services rendered within one year prior to the-, execution of such assignment, shall be preferred before any other debt; and should the assets of the assignor or assignors not be sufficient to pay in full all the claims preferred, pursuant to this section, they shall be applied to the payment of the same pro rata to the amount of each such claim.” It was provided that that act should take effect immediately. The effect of the second act was to leave out of section 29 the-words relating to truckmen or cartmen, and it is the act of May 19, 1897 (Chap. 624), that must be construed in determining whether the claimant here is entitled to a preference. It is to be observed that the act declares that “ the wages or salaries actually owing to-the employes of the assignor * * * at the time of the execution of the assignment for services rendered within one year prior to the execution of such assignment.” It is to be observed that the proofs do not show that the personal services of the claimant entered into and constituted the foundation for the principal part of the claim which he has made against theassignee. Nor does it appear by the proofs that he was exclusively in the service of the assignor. He was carrying on a general business, and incidentally, by means of teams, transacted business as a. carrier for the assignor. In People v. Remington (45 Hun, 329, 338; S. C. affd., 109 N. Y. 631) it was said: “ The burden is upon persons claiming preferences to bring themselves, by evidence, within the statute.” It was further said in that case that a statute which undertook to-provide preferences “ is a derogation of the common law, and it should not be extended to cases not within the reason, as well as within the words, of the statute. * * * ” It is contended that the case of People v. Remington (supra) has been qualified to some extent by the case of Palmer v. Van Santvoord (153 N. Y. 612). In the latter case Andrews, Oh. J., in speaking of the act of 1885 (Chap. 376), which relates to preferences in cases of receivership, said: “ The act deals with the distribution of the assets of insolvent corporations, or corporations in the hands of receivers. The purpose of the act is that the debts of the corporation for the wages of employees, including in the designation ■all who in common understanding held that relation to the corporation, should be the first charge on the assets, and that business debts .should be postponed thereto.” In that case a person was employed by a mowing machine company at a compensation of $100 per month to sell or solicit sales of ■the machines manufactured by the company, and to set up, take down and repair machines sold, and it was held that he was an ■employee and that his claim for wages was entitled to a preference under the act of 1885. We see nothing in that case which trenches upon the doctrine laid down in People v. Remington (supra), and we are of the opinion that the claimant-in this case failed to bring himself within the terms of the statute of 1897, as amended by ■chapter 624. The foregoing views lead to the conclusion that the judgment ¡appealed from should be reversed and the claim for a preference rejected. All concurred, except Ward, J., not voting. Judgment reversed and a new trial ordered before another referee, with cost to the appellant to abide the event.