23 Minn. 242 | Minn. | 1876
This is an action for taking and con
After the proofs closed, the plaintiff submitted to the court certain requests for instructions to the jury, mainly abstract propositions so far as regards the fact found by the special verdict, which fact must control the result of the controversy. So far as these propositions have any application to the fact as found, they are, in substance, these:
It is the intent with which conveyances of property are made, and not the terms in which they are expressed, that determines their validity as against the creditors of the assignor. If such intent be in any manner to hinder, delay, or defraud the creditors, they are void as against the creditors intended to be hindered, delayed, or defrauded, although they may be so expressed as, if carried out according to their terms, there would be no such effect. Assignments of all the debtor’s property for the payment of his debts are tolerated, although there is incidental to them the delay necessary to the conversion of the property into money, and its distribution among the creditors. In this respect they may he regarded as an exception to the rule. But no other delay than such as is reasonably necessary to the application of the property to the payment of the debts is permitted. On this ground a provision in an assignment, allowing the assignee to sell on credit, renders the assignment void. Greenleaf v. Edes, 2 Minn. 2134; Nicholson v. Leavitt, 6 N. Y. 510 ; Brigham v. Tillinghast, 13 N. Y. 215.
Also, the sole purpose, of the assignment must be to immediately appropriate the debtor’s property to the payment of his debts. The reservation of any benefit or advantage to the debtor, before his debts shall be fully paid, will avoid the assignment. A discharge from his debts, without full payment, is such a benefit or advantage to the debtor as, if the assignment exact it as a condition of participating in the distribution, will avoid the assignment. Wakeman v. Grover, 4 Paige, 23 ; s. c., (Grover v. Wake
The assignment in this case was executed, as found by the jury, with the intent and for the purpose of thereby effecting a compromise with the assignor’s creditors. The purpose in executing it, then, was to place the property beyond the reach of creditors, in order to give the assignor time, and to place him in position, to be able to bring the creditors to compound their debts. To effect this, delay in appropriating the property to the payment of his debts would of course be necessary. The immediate application of the property to the demands of the creditors would be inconsistent with the purpose to effect a compromise by means of the assignment, and vice versa. ^The intent to effect a compromise by means of the assignment includes the intent to delay the execution of the trust expressed in it, at least so long as might be necessary for the assignor to ascertain if the creditors -would compromise. This was an intent to delay beyond the delay which might be necessarily incident to the execution of the trust to sell the property and pay the proceeds to the creditors, and was, therefore, fraudulent. The intent was also thereby to secure a benefit to the assignor, to wit, a discharge from his debts without
It has been decided by this court that an assignee, in an assignment for the benefit of creditors, is not regarded as a purchaser' for a valuable consideration, when the assignment is assailed for fraud upon the creditors, and that knowledge in the assignee of the assignor’s fraudulent intent is not necessary to enable the creditors to avoid the assignment. Gere v. Murray, 6 Minn. 305. That decision is in accordance with the weight of authority, and with principle. .
Judgment affirmed.