20 N.Y.S. 810 | N.Y. Sup. Ct. | 1892
This action w,as brought to set aside a general assignment made by the defendants Bishop So Crawford to the defendant Grasse, and also a transfer of outstanding accounts executed and delivered by the defendants Bishop & Crawford to the defendant Tilge. It was claimed that the general assignment and the transfer of accounts were executed contemporaneously, and as part and parcel of the same transaction, and with intent to violate chapter 503 of the Laws of 1887, forbidding preferences except to the extent of one third of the actual assets of a debtor, and that, therefore, the assignment as well as the transfer is tainted with fraud, and must fall. It appears from the evidence that the transfer of accounts was executed and delivered on the 10th of January, 1890, and that the assignment was not executed until the following day. But it further appears that the assignment had been determined upon, on the day of the execution of the transfer. It is true that the learned court below refused to find that the transfer was made in contemplation of and as part and parcel of the making of the general assignment. But it is apparent that this refusal may have been based upon the assumption that, if the assignee of the accounts know nothing about the contemplated assignment, it was entirely immaterial whether such assign
All that is necessary in order to make a transfer of property or the suffering of a decree or judgment void, is that it shall have been made or suffered with intent to hinder, delay, or defraud creditors. How, in ease a party contemplating making an assignment, for the purpose of evading the restrictions of the assignment law, knowingly makes transfers of his property as security to creditors in excess of that which is allowed by the assignment law, and thereby attempts to evade the provisions of the statute, such transfer is made with intent to hinder, delay, and defraud his creditors; and therefore, under the express words of the statute, it is void, whether the transferee has knowledge of such intent or not. The only saving clause specified in the statute is that contained in section 5, where it is provided that “the provisions of this chapter shall not be construed in any manner to impair the title of a purchaser for a valuable consideration, unless it shall appear that" such purchaser had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor. ” Therefore the question of the intent of the transferee is only of importance where he is a purchaser for value, and then, even, he is not protected if he knew of the intent of the transferrer. Therefore the confession of a judgment, or the transfer of accounts for security, if made with intent to evade the statute, is necessarily void; and if a general assignment for the alleged benefit of creditors is also made as part and parcel of this scheme, that must also necessarily fall.
It is entirely erroneous to suppose that the case of Berger v. Varrelmann is an authority for the. proposition that an intent to evade the statute by the confession of a judgment, and then making an assignment, does not invalidate the assignment. In the opinion of the minority of the court that position is expressly held, and nothing to the contrary can be found in the pre