IRELAND a. POTTER

IRELAND a. POTTER. Supreme Court, First District; Special Term, June, 1863. Assignment foe Benefit of Ceeditobs.—Commissions. An assignee for benefit of creditors, who compromises debts for less than the whole sum due, is entitled, as against other creditors, to be allowed only the amount actually paid. A creditor, who, having received an assignment of property to provide for his own security as well as the security of other debtors, and who repudiates the trust by insisting that the assignment to him was absolute, and refuses to pay other creditors out of the surplus, is not entitled to any commissions as a trustee upon its being established by a creditor that he is a trustee. This action was brought by John B. Ireland, as receiver, against Samuel B. Potter, Archibald A. Thomas, and Frederick F. Betts. The plaintiff was appointed a receiver under supplementary proceedings on a judgment for $2,535.62, recovered against the defendants Archibald A. Thomas and Frederick F. Betts, who were copartners under the firm-name of Frederick F. Betts & Co. On the 7th day of October, 1861, Frederick F. Betts & Co., by an absolute bill of sale, sold and transferred all their property, amounting to upwards of $14,000, to the defendant Samuel B. Potter, to secure the sum of $8,000 due from them to Potter, under an agreement that Potter should first receive his own debt, and pay the balance to the creditors of Frederick F. Betts & Co. Potter received for the property so transferred $21,000, and, after deducting the amount due to himself, he settled several of the debts of Frederick F. Betts & Co., by paying from forty to fifty cents on a dollar and taking receipts in full. He refused to pay any thing over to the plaintiff as receiver of Frederick F. Betts & Co., who, as such receiver, commenced this action. The case ivas tried, and sent to a referee to take and state an account. The referee reported that the defendant Potter had in his hands the sum of $1,987.39. The defendant Rotter filed exceptions to the report of the referee, and the plaintiff made this motion to confirm the referee’s report; the other facts sufficiently appear in the opinion of the court. Ira D. Warren, for the motion, cited Story on Ag., § 211; 11 Paige, 26; Moore a. Moore, 5 N. Y., 256; 3 Paige, 180. D. M. Porter, in opposition, cited 4 N. Y, 552; Story on Bailm., 306; Story on Cont., 682; 9 Paige, 398. [MAJORITY — Peckham, J.] Peckham, J. This cause comes now to be disposed of upon the matters reserved at the hearing. By the report of the referee, it appears that a considerable balance is now in the hands of the defendant, which, under the decree rendered herein, belongs to the plaintiff. The defendant excepts to the report, because the referee did not allow him the gross amount of the several debts satisfied by the defendant, instead of allowing him, as he did, the several sums he paid to obtain such satisfactions. I am unable to see on the evidence any grounds for the claim of the defendant. There is no evidence that any claim so satisfied was assigned to him, so that he could claim the whole amount as the owner or assignee. The evidence simply shows the payment by him of so much money (something less than the face of the debt); and for the whole amount of the money paid, and interest, the defendant is allowed by the referee. The defendant next excepts to the report, because the referee did not allow any commissions to him. I do not think any commissions should be allowed. No case has gone so far as to allow commissions to a creditor, who, as assignee of a demand for his own security and benefit, has received more than his debt from the assignor’s effects. The case of Meacham a. Stemes (9 Paige, 398), cited by defendant’s counsel, falls far short of that. In the English courts, no commissions are allowed to trustees in the execution of trusts. In this State, they are allowed to the same extent as to executors, &c. In this case, the defendant, as appears by the decree and by the evidence, took the property as an absolute purchaser on the face of the assignment, and in his answer he claims to he the absolute owner. On the trial, he denied the right of any creditor of the assignors ; though finally, when the evidence "clearly established that he had taken the assignment simply to secure his debt, he claimed to show that he had paid out all the surplus. I think the case shows that in law he converted the property, and that he might well be held as a wrongdoer. He utterly repudiated any trust, though he did, in fact, pay some creditors the whole or a part of their demands. Such payments seem generally, if not universally, to have been made rather on compulsion, or at least on threats of it. In this case, he wholly refused to pay the plaintiff any thing, and denied his right to any thing. The assignment by the decree is declared to be held as security simply, and not, as it purports, as an absolute sale. It is not declared that the defendant has been guilty of any fraud in terms, nor, perhaps, by any necessary effect; but where a defendant takes the course taken here, I am not willing to say that he is entitled to any commissions, for he has assumed to discharge no trust. His expenses have been liberally allowed to him. Ho objection or exception is taken by the plaintiff to the report, or I should have been extremely unwilling to allow a charge of $26t), paid to a person introduced to the defendant “ at the Hational Hotel” at Washington, for some sort of service in obtaining the money from the authorities at Washington. The name of the person is not stated or recollected by the defendant, and I should infer from defendant’s evidence that the payment was made for the influence of that unnamed person with the authorities to obtain the payment of a debt confessedly due and properly certified. I should be extremely unwilling to give any sanction to the allowance of such a claim. But there may be some explanation not disclosed, and as no exception is taken by the plaintiff, I think the report should be confirmed. The fourth exception is not well taken, as there is nothing in the case showing that that judgment was recovered against the defendant for any liability incurred or assumed by him under the assignment. It is so “ alleged,” but not so proved by him. . I do not think this a case for an extra allowance under all the circumstances. Motion to confirm the referee’s report granted, with costs.