Mills v. Parkhurst

• Decision Date: 20 March 1891
• Citation: 26 N.E. 1041,126 N.Y. 89
• Parties: MILLS et al. v. PARKHURST et al.
• Court: New York Court of Appeals Court of Appeals

126 N.Y. 89

26 N.E. 1041

MILLS et al.

v.PARKHURST et al.

Court of Appeals of New York.

March 20, 1891.

Appeal from supreme court, general term, first department.

The appellants, being creditors of Henry W. Perine, an insolvent debtor, upon judgments against him, brought an action to set aside an assignment made by Perine for the benefit of his creditors, as fraudulent, in which they were eventually defeated. Before the action was commenced they had made proof of their claims before the assignee. The deed of assignment provided for certain preferences in payments from the assigned estate, but these appellants were not among the creditors preferred. The present action was brought on behalf of the creditors to compel the assignee to account and for a distribution of the assets in his hands. A reference was therein ordered to a referee to ascertain and to report the amount due each of the creditors who should come in under the order and seek the benefit of this action. Appellants appeared by counsel before the referee, but protesting and giving notice that they waived no rights or remedies theretofore exercised, or that might thereafter be insisted upon. At that time an appeal was pending to this court from the judgment in their action, which upheld the validity of the assignment, and objections were made by other creditors to the allowance by the referee of the appellants' claims, upon the ground that they were proceeding in hostility to the assignment in prosecuting their other action. The referee, however, allowed the claims, on the theory that by appearing and refusing to withdraw their claims there was an election to participate in the accounting. Upon the coming in of the referee's report the court, at special term, sustained the exceptions of the creditors to the allowance of the appellants' claims, on the ground stated, and the court at general term affirmed that decision. From the judgment of affirmance the appellants have appealed to this court.

Benjamin S. Harmon, for appellants.

Humphrey McMaster, for respondent.

GRAY, J., ( after stating the facts as above.)

The first of the two questions which were presented relates to the right of the appellants to come in and share in the distribution of the assigned estate, and the argument against their right is that, in bringing and prosecuting the action to set aside the assignment as fraudulent, they had thereby elected to repudiate the assignment. The doctrine of election, which has been thus far successfully invoked in support of the argument, does not seem to be applicable to such a case, and no authority is found warranting its application. The learned justices, who considered the question at the special and general terms, were influenced in their conclusions by the supposition that these appellants were pursuing two remedies upon their claims against their debtor Perine, and that, though direct authority might be wanting upon precisely such a case, yet analogy with adjudged cases, which hold that inconsistent remedies may not be availed of or concurrently pursued, required the application of the doctrine of election in this instance. If the definition of the legal position taken by these appellants was correctly assumed below, we should have nothing to say, and could not add to their opinion. But we cannot agree with them in their view of the situation of the parties. The elements required to make out a case of election were wanting. The doctrine of election, usually predicated of inconsistent remedies, consists in holding the party, to whom several course were open for obtaining relief, to his first election, where subsequently he attempts to avail himself of some further and other remedy not consistent with, but contradictory of, his previous attitude and action upon his claim. The basis for the application of the doctrine is in the proposition that where there is, by law or by contract, a choice between two remedies, which proceed upon opposite and irreconcilable claims of right, the one taken must exclude and bar the prosecution of the other. An extended citation of authorities illustrating the principle, in cases of breaches of contract, or of a duty imposed...