13 Wend. 240 | Court for the Trial of Impeachments and Correction of Errors | 1834
The following opinion was delivered:
The question is whether the deed of assignment was void absolutely, or voidable only upon the institution of proper proceedings.
The vice-chancellor has argued the broad question whether an assignment like the present is void or voidable ; and comes to the conclusion that it is voidable only, and not void; and only to be avoided by proper proceedings, and a decree declaring it void. The chancellor confines himself, in his opinion, to the facts of the case, and says : “ The defendant,
Why is any assignment by a debtor fraudulent ? It is only so, because the effect of it is to delay or defeat creditors in the collection of their demands. It is a proceeding, therefore, adverse to the interests and wishes of the creditors. But if all the creditors assent to such assignment, and agree voluntarily to take their proportion of the assigned property and discharge the debtor, there is no fraud in such a transaction, and of course such an assignment, executed with the assent of all the creditors, would be valid, not void. The assignment in the case now before us was declared void as to the judgment creditors who filed their bill to set it aside ; but suppose those creditors had assented to the assignment as the appellant Hone did, would not they have been estopped from alleging any fraud, when, with a full knowledge of its effects, they had assented to it ? It surely could not be said to have been executed with intent to delay and hinder them in the collection of their demands, when they had agreed to its terms. It is universally held, and so are all the cases, that deeds which are fraudulent and void as to creditors, are valid as between the parties. It is their agreement, deliberately entered into, and as between them, there is no fraud. They are not permitted to say that because it is invalid as to others, it is so as to them. The same reason does not exist. There was no attempt to defraud each other. The same reason applies to all who are parties to it—to all who, being affected by it, have assented to it—and fully sustains his honor, the chancellor, in the decision made by him, and the ground upon which he placed the decision.
Hone, in the case under consideration, cannot be permitted to deny that Hall and Swan were the assignees of Moffat, nor that they were not lawfully in possession of the goods in question. He was therefore bound, as between him and Hall and Swan, to account to them, and should have paid over the proceeds to the receiver. It is well settled that the creditors acquire liens, and are entitled to priority of payment, in the
The decree of the chancellor should be affirmed, with costs.
The Court being unanimously of the same opinion, the decree of the Chancellor was accordingly affirmed.