No. 152 | Pa. | May 21, 1883
The opinion of the court ■ was delivered
The court below held that the mortgage in controversy was not an assignment for the benefit of creditors within the meaning of the Act of June 14th 1836 entitled “ An Act relating to assignees for the benefit of creditors and other trustees.” The court further ruled that it had no jurisdiction to distribute the money realized upon the mortgage from a sale of the mortgaged premises, but that the distribution must be made in Philadelwhere the trustee resides.
If we concede the first proposition to be correct the second follows logically. We have therefore presented the single question whether the mortgage was in effect an assignment under the Act of 1836.
The recent case of Wallace & Krebs v. Wainright & Co., 6 W. N. C. 550, contains much of the learning upon this branch of the law, and it would be useless to repeat what was there said, or.to again review the authorities there referred to. In Wallace & Krebs the debtor assigned a number of judgments to his attorneys in payment of the creditors of the assignor naming them. There was no express trust, but this court held there
The principle to be deduced from the authorities is that the form of the transaction is not material; the law cannot be evaded “ by any sham departure from the general form of assignments Fallon’s Appeal, 6 Wright 235; hence an absolute transfer of a man’s property in trust for the payment of his debts must be regarded as an assignment within the Act of 1836, without regard to the particular form of the conveyance. But it must be an assignment or transfer of property. Judgments confessed to secure creditors are not such preferences as are avoided by the Act of 1843, although an assignment for creditors was intended and was shortly afterwards executed : Blakey’s Appeal, 7 Barr 449.
We are of opinion that the mortgage in this case was not an assignment for creditors under the Act of 1836. That it was not intended as such by either the mortgagors or the mortgagee is too plain for argument, nor has any of the creditors intended to he benefited thereby ever treated it as such. The facts connected with it, briefly stated, are that Malin Brothers, residents of Montgomery county, becoming embarrassed in 1875, obtained an extension of 24 months from their creditors, and in order to secure their liabilities thus extended, executed the mortgage in question upon their real estate to the appellant as trustee. The consideration of the mortgage was the extension,-and had the extended paper been paid at maturity, the condition of the 'mortgage would have been performed, and,the mortgagors entitled to have satisfaction entered of record.
There is no room here for an allegation that the mortgage was intended as an evasion of the Act of 1836. It was a security for the creditors precisely as if the mortgagors had given indorsed paper or other personal security to procure an extension. Moreover the mortgage was not an absolute transfer of anything, it was a mere pledge or security. In this it lacks one of the essential features of assignments under the Act of 1836. In all the instruments which have been held to be assignments for creditors, there has been in some form an absolute transfer of the property. The assignor parted with all his title and control thereof, save alone the right to have any surplus re-conveyed to him that might remain after the payment of his debts.
We are of opinion that the learned judge below ruled this case upon correct principles.
The decree is affirmed and the appeal dismissed at the costs of the appellant.