therein. Paddell v. Janes (1914), 84 Misc. 212, 145 N. Y. Supp. 868.

One of the chief requisites of an assignment is that the assignor shall place all of his property, both real and personal, in the possession of his trustee. The failure to do so makes the assignment under the statutes absolutely void. Paddell v. Janes (1914), 84 Misc. 212, 222, 145 N. Y. Supp. 868.

The fact that an assignee for the benefit of creditors has failed to comply with the statute, regarding the recording of the assignment and the giving of a bond does not render the assignment itself void or cause the title to the assets to revert to the assignor. Matter of Berman (1916), 173 App. Div. 689, 160 N. Y. Supp. 79.

Where an assignment, absolute in form and actually delivered, is made upon the condition that it is to provide a cash payment to the creditors only in case all of them agree to the proposed composition, an inquiry may be made as to whether the conditions were ever fulfilled, and if it appears that they were not, the instrument will be held never to have become effective. Doughty v. Weston (1916), 174 App. Div. 212, 160 N. Y. Supp. 1075.

While an assignee for creditors may use all of the assigned property to pay creditors of the assignor, there is a reversion in favor of the assignor of any property left after the execution of the trust imposed whether such reversion be reserved in the assignment or not. Paddell v. Janes (1914), 84 Misc. 212, 145 N. Y. Supp. 868.

Where the individual general assignments made by the members of a firm directed the assignee to discharge in full all debts and liabilities of the partnership and of the assignor, and provided that, if the residue of the proceeds was not sufficient to pay said debts and interest in full, he should apply the residue of the property to the payment of the debts ratably and in proportion, so that no distinction was made between the individual debts and firm debts, a judgment creditor of the firm is entitled to share in the individual assets of the assignors equally with their individual creditors, and with creditors of the firm to the extent of the balance remaining due upon the claim against the firm. Matter of Whitney & Kitchen (1911), 146 App. Div. 45, 130 N. Y. Supp. 629.

ARTICLE V.

RIGHTS, POWERS, AND DUTIES OF ASSIGNEES.

(Fiero, Spec. Pro., 3rd Ed., pp. 1032-1036.)

The assignee is merely a trustee, and not owner; he buys nothing and pays nothing, but takes the title for the purpose of trust duties. His obligations are those which pertain to voluntary trustees, not acting gratutiously, and he is bound to exercise that degree of diligence which persons of ordinary prudence are accustomed to use in their own affairs. Baillargeon v. Dumoulin (1913), 148 N. Y. Supp. 443. There is no contractual relation between one making a general assignment for creditors and the assignee who takes by appointment and not by way of contract. Paddell v. Janes (1914), 84 Misc. 212, 145 N. Y. Supp. 868. An assignee for creditors is merely the representative of the assignor in the payment of debts and is accountable to him for all property not used for that purpose, and takes the property subject to the equities of third parties. Paddell v. Janes (1914), 84 Misc. 212, 145 N. Y. Supp. 868. An assignee for the benefit of creditors who takes possession of the assignor's store and locks the same with knowledge that the rent is unpaid, so that he has reason to believe that summary proceedings will be started, is liable to the assignor for the value of the goods which are stolen when the landlord removes them to the sidewalk, if he is negligent in taking no steps to protect the goods. Welensky v. Breslin (1917), 176 App. Div. 534, 163 N. Y. Supp. 257.

The failure of an assignee to record the assignment and give a bond may furnish sufficient reason for his removal, but in such a case it is the duty of the court to appoint another assignee. Matter of Berman (1916), 173 App. Div. 689, 160 N. Y. Supp.

79.

An assignee for the benefit of creditors is entitled to examine persons who have taken possession of and sold the bankrupt's property under the contention that they delivered it to the insolvent under contracts of conditional sale. But such examination should be had before a judge rather than before a referee where the latter course would entail unnecessary expense upon the parties. Matter of U. S. Restaurant & Realty Co. (1911), 146 App. Div. 114, 130 N. Y. Supp. 606.

Where a lessee, having sublet a portion of the demised premises at an annual rental, payable monthly, subsequently makes an assignment for the benefit of creditors, the assignee may recover of the sub-tenant rent due at the time of the assignment although subsequently the owner of the property rescinded the assignor's lease because of its insolvency, and dispossessed the sub-tenants by summary proceedings. Meyer v. Schulte (1913), 160 App. Div. 236, 144 N. Y. Supp. 1028, affd., 213 N. Y. 675. The assignee's use and occupation of premises leased to his assignor is a sufficient consideration for his personal promise to pay the rental of the premises. Kage v. Stern (1913), 144 N. Y. Supp. 160.

In conformity with the extensive amendments to the Debtor and Creditor Law effected by chapter 360 of the Laws of 1913 and chapter 469 of the Laws of 1915, an assignee for the benefit of creditors may not sell at public auction the assets of the assigned estate without previous order of the court obtained on the return of notice to creditors and others interested. Matter of Gurian (1915), 92 Misc. 296, 155 N. Y. Supp. 930.

Under section 17 of the Debtor and Creditor Law the assignee for the benefit of creditors of a mortgagor may attack the validity of a mortgage which was not filed for more than ten months after it was made. Stich v. Paul (1917), 100 Misc. 594, 166 N. Y. Supp. 440.

A general assignment transfers to the assignee all the rights which the assignor had under an undertaking given to secure an attachment in an action in which the assignor was the defendant. Joffe-Mayer Co. v. Raden (1912), 134 N. Y. Supp. 1037.

The widow and executrix of the will of a deceased assignee for the benefit of creditors should not be appointed as substituted assignee in the place of her husband over the objection of creditors who claim that the deceased assignee was dilatory in the performance of his trust, failed to prosecute claims with diligence, made improper payments to counsel, and that his account is bound to be surcharged in substantial amounts. Matter of Reilly (1918), 185 App. Div. 581, 173 N. Y. Supp. 248.

ARTICLE VII.

RIGHTS AND REMEDIES OF CREDITORS.

(Fiero, Spec. Pro., 3rd Ed., pp. 1039-1040.)

An application for an order discharging an assignee after the execution of a composition agreement by creditors alleged to be all of the creditors of the assignor will not be granted where it appears that the notice to present claims has not been published. In re Lewis (1915), 156 N. Y. Supp. 307.

Since the enactment of section 13 of the Debtor and Creditor Law by L. 1914, ch. 360, providing that debts of the assignor may be proved and allowed against his estate "whether due or not due," unmatured claims against the debtor are subject to the right of set-off by a creditor. Matter of Bluestone (1915), 169 App. Div. 462, 155 N. Y. Supp. 161.

Where a general assignment for the benefit of creditors was filed in the proper county clerk's office on November 11, 1914, at 1:28 P. M., the filing of a creditor's claim with the attorneys for the assignee in the forenoon of November 11, 1915, is timely. Matter of Vietor (1917), 101 Misc. 308, 166 N. Y. Supp. 1012. The court has the power and it is its duty to treat formal verified proofs of claim filed by creditors after the expiration of the prescribed time limit as amendments of unverified proofs of claim previously filed. Matter of Vietor (1917), 101 Misc. 308, 166 N. Y. Supp. 1012.

A creditor bank which since the making of a general assignment by a debtor has realized on collateral security held by it will be allowed a dividend only upon the balance of its claim. Matter of Vietor (1917), 101 Misc. 308, 166 N. Y. Supp. 1012.

Where the assignors have obtained the money by means of fraud, they at once become liable to repay the same, and the fact that the indebtedness is not due when the assignment was made does not affect the right of set-off. Wolf v. National City Bank (1915), 170 App. Div. 565, 156 N. Y. Supp. 575. Where a firm of stockbrokers has made a general assignment for the benefit of creditors a customer who owns stock pledged with the insolvent as security for any balance due from him is entitled to a return of the securities on payment of the balance due, where the certificates have been identified and there is no other claim

upon them. Matter of Dickenson (1916), 171 App. Div. 486, 157 N. Y. Supp. 248.

ARTICLE VIII.

PREFERENCES.

(Fiero, Spec. Pro., 3rd Ed., pp. 1040-1043.)

An employee of an assignor is entitled to be scheduled as a preferred creditor for salary due at the date of the assignment, and also for amounts due on notes executed prior to the assignment in payment of monthly bonuses, but not due until after the date of the assignment. Such notes should be considered as "actually owing" within the meaning of the statute, although not presently payable, Strauss v. Morrison (1914), 165 App. Div. 163, 150 N. Y. Supp. 587.

ARTICLE IX.

ACCOUNTING BY ASSIGNEE.

(Fiero, Spec. Pro., 3rd Ed., pp. 1043-1049.)

Notice must be given to all creditors when the assignee applies for the confirmation of the report of the referee appointed to take and state his account, for a final order for the distribution of the assigned estate, and for the discharge of the assignee and the surety on the bond. Field v. Empire Case Goods Co. (1917), 166 N. Y. Supp. 508. An assignee must give notice to known claimants of an application for an accounting for final discharge although he also advertises for claimants and the claim is not filed. In re Flower (1917), 167 N. Y. Supp. 778.

The court is without power to dispense with a reference on the hearing of the final account of an assignee for the benefit of creditors. Matter of McMahon (1915), 92 Misc. 305, 155 N. Y. Supp. 864.

Payment of fees of attorneys and compensation for expert services should be deferred until the final accounting and the claimants therefor given an opportunity to explain their claims and compelled to submit to an axamination and cross-examination in open court where it appears that the quantity and quality of the legal services rendered by the attorneys is not clearly discernible