12 Ala. 101 | Ala. | 1847
The principal question to be determined, arises upon the last clause of the deed, which it is insisted created a resulting trust in favor of the grantor, and rendered the deed void.
The law of this court, on the subject of assignments by an insolvent, is thus stated in Ashurst v. Martin, 9 Porter, 566 : “ A debtor may convey his property in trust to pay one or more creditors in full, or to pay his creditors in unequal proportions, provided he relinquishes all control over it, and stipulates for no pecuniary interest to himself, but fairly, and bona fide, appropriates it to the payment of his debts.” This is again considered, and re-affirmed, in Gazzam v. Poyntz, 4 Ala. 379, and may be considered as the settled law of this court. See also Hyslop v. Clark, 14 Johns. 458; Austin v. Bell, 20 Id. 442; Mackie v. Carnes, 5 Cow. 547.
The only question, then, is, whether this assignment, being made by an insolvent, and conveying all his property to trustees, by a deed giving preferences to certain creditors, does provide for a pecuniary benefit to the grantor.
By the terms of the deed, the trustee is required, after the execution of the trusts, to pay over the. surplus, if any, to the debtor. What are the trusts of the deed ? First, to pay the preferred creditors. Second, such of the remaining creditors as within four months executed a telease, and the residue, if any, to the debtor. It is very clear there was no authority on the part of the trustees, to pay any creditor of the second class, who did not release, but the effects, which in the event of a release are to be thus appropriated, if no such release is made, are to be paid to the debtor. If such a conveyance can be permitted, it will be in the power of an insolvent debt- or, by a conveyance to a trustee, to place his property beyond the legal pursuit of his creditors — to exact from them a release, as the condition upon which they shall be permitted to participate in the property thus conveyed, and m the event of their refusal, that the property thus placed beyond their reach, shall be restored to him. This is a direct stipulation for the benefit of the debtor, and is such an invasion of the
This principle, as applicable to such a provision, is asserted by Chancellor Kent, in his 2 Com. § 89, where the leading authorities are collected, and éxamined. See also, Burd v. Smith, 4 Dall. 76; Seaving v. Brinkerhoff, 5 Johns. Ch. 332; Harris v. Sumner, 2 Pick. 129; Passmore v. Eldridge, 12 S. & R. 198.
This is not like a clause in a deed providing for the payment of all the creditors, and directing the trustee to pay the surplus, if any, to the grantor, because that would be the legal effect of the deed, if no such provision was inserted.— [Johnson v. Cunningham, 1 Ala. 259.] Nor is there any thing in the case of Hindman v. Dill & Co. 11 Ala. 689, adverse to the view we are now taking. That was not the assignment of all the effects of the debtor, but was merely the exercise of the admitted right óf a debtor, to prefer one of his creditors, by a conveyance of slaves to a trustee, to be sold for the payment of the debt; and if the sale yielded a larger sum than was necessary to pay the debt, the law implied that it was to be paid over to the grantor. There was therefore no impropriety in inserting such a stipulation in the deed.
The difference between that case, and the present, is, that here all the effects of the debtor were transferred to the trustee, not absolutely for the payment of the creditors, but upon condition that they agreed to certain terms which the debtor imposed on them, and if they did not agree to these terms, then the property, or its avails, or such portion of it as was not paid to the creditors, was to be returned to the grantor. The only coercion the debtor can lawfully exercise over his
The objection for the want of proper parties, cannot be made by the defendant in this court, as the chancellor overruled the demurrer to the bill for this cause. If the objection had been tenable, and sustained by the chancellor, the effect would not have been a dismissal of the bill, but the party would have been permitted to amend. It cannot be therefore urged here as a justification for the chancellor, in dismissing the bill for another insufficient cause.
For the same reason no objection can be made here to the bill for uncertainty, in not sufficiently describing the decree of the complainant, which is the foundation of the bill. If
The decree dismissing the bill must be reversed, and the cause remanded for further proceedings.