2 Stew. 86 | Ala. | 1829
On the answers of the garnishees, the plaintiffs moved the Court below for a judgment against them; which motion was overruled, and a judgment rendered by which they were discharged. The correctness of which judgment is now assigned for error. In determining this question, two points are presented: 1. The legality of the deed which accompanies the answer of Messrs G. G. & Co. 2. The extent and effect of its operations.
The counsel of the plaintiff insists, that the deed cannot be recognized as valid, and that it is a fraud in law upon the creditors of the assignors who have not executed it, for ■these causes:
1st. Because there is no proof of execution by the assignors, trustees, or any of the creditors, nor of the delivery •of the property conveyed.
2d. Because there is no specific description of the lands, personal estate, notes, accounts, &c. and the debts proposed to be secured.
3d. Because it gives a preference to some of the creditors over others.
4th. Because it is in itself the making of a bankrupt law, for the benefit of the assignors.
We are inclined to the opinion that the deed, for any thing appearing on its face, is valid at law, without an execution of it by any of the creditors of the assignors. It conveys all their property, without an estimate of its value, for the payment of three hundred dollars to Samuel Clark, and then to such other creditors as might execute it; no act is required to be done by Clark, to entitle him to the benefit of the deed, but as to him, the deed becomes immediately operative on its execution by the assignors. Nor is it considered of the essence of the deed that the trustees should have executed it, or assented to the trust; if they had refused,-equity could appoint others in their stead, with all powers which the deed conferred.
But the deed purports to have been executed by the assignors, assignees, and some of the creditors; and wore it necessary, we might presume an execution by all the parties whose names appear, and more especially by the creditors, as it is for their benefit.
With regard to the generality of description of the property conveyed, and of the debts intended to be secured, this cannot be held to invalidate the deed.. However proper it might be to require a specific description of property, where a conveyance is made for the security of a particular debt, that it might appear that the security was not largely disproportioned in value to the amount of the debt,, we* should hesitate before we could say, that that circumstance, would, of itself, avoid such a deed. But where a debtor-conveys his entire property for the benefit of all his creditors, we are unable to discover any sensible reason why he-should particularize each object. As every thing is given, it will not be, to be distinguished from other property;, and as it is granted for the payment of all the creditors, it cannot be objected that it is greatly disproportioned to the debts of those who have come in under the deed. Nor have we been able to discover any reason why the lands eenvoyed should be described by metes and bounds; they can be identified by the title papers, which it is presumable %vere in the possession of the assignors; and when the trustees have made out a title in the assignors, they can use the deed as evidencing an assignment of that title to them
*It is a well ascertained rule of law, that the right of the clebtor to control his property is full and complete, and not subject to restraint by law, until the creditor acquires a lien upon it.
The right of the debtor to dispose of his property being uncontrolable by law, where there is no lien already attaching in favor of the creditor; it follows necessarily that he may secure the debt of one creditor in preference to another, and that the security given cannot be prejudiced by the insolvency of the debtor, if the creditor has not acted improperly in obtaining it.
That the deed is the making of a bankrupt law, for the benefit of the assignors, is an ar gument which we think cannot be well founded. Before, with any degree of justice, it can be assimilated to a law, it would be proper to shew that it was compulsory upon the creditors: this we apprehend will not be insisted on. The creditors may or may not assent to its provisions; if they yield their assent, they must be paid as it directs, if they withhold it, they can only look to the property conveyed after the debts of the assenting creditors are satisfied. This objection, we conceive, acquires no weight from the fact, that the assent of the creditor operates a release of the liability of the assignors from payment, on a deficiency of property for that purpose; for, as already remarked, he is Hot forced to assent. It seems to be the better opinion, that a debtor may indirectly exercise a coercion over bis creditors, by requiring them, if they take a benefit under the deed, to give a release.
The counsel of the plaintiff insist, that the assignors had no greater control over their property, without the jurisdic
Having shewn the extent of the influence of an assignment by positive law upon the estate of the debtor; we propose next to inquire, whether there be any analogy between such an assignment, and one made by the debtor himself. ín respect to the right of the owner to control his property, it is assumed as a correct rule, that, intime oí peace, personal properly has no locality; and that therefore it is competent for him to dispose of it by any legal conveyance, though it may at the same time be without the country of his residence, or the place where the conveyance was executed. A different rule might seriously affect trade, and would require an inhibition upon the transfer of property to an impolitic extent. Lord Karnes, in his “Principles of Equity,”
It is not pretended to question the right of any country to regulate, by positive law, the disposition of personal property found within its limits, so as to give a preference to its attaching creditor over the assignees of a non resident debtor. Such á right we believe to exist when it has not been abolished by the restrictions of fundamental law. But when this right has never been exercised, it is compatible with the rights of sovereignty for the legal forums of every country, to give effect to a conveyance by act of the party; and in point of law, they have no discretion in refusing their aid. We have no statute which sequesters the estate of the non resident debtor, though insolvent, for the benefit of the resident creditor, and cannot therefore deny to the deed the effect it proposes.
The reason employed, sustained as it is by authority of the highest respectability, we think most manifestly shews, that the parallel insisted on between the two descriptions of conveyance, cannot with justice be drawn: the one i» voluntary, the other in invitum; the one is the act of the party, the other the act of the law; the one reaches the estate of the assignor wherever it may be, the other only where infra terilorium.
Having patiently investigated the case, we are of opinion, that the Court, below decided correctly in refusing a judgment against the garnishees, and the judement must therefore be affirmed.
The questions presen ted by the various assignments of error are: 1. Does sufficient evidence of the due execution of the deed of assignment appear to have been offered to the Circuit Court, to defeat the plaintiff’s attachment? 2. Is the deed on its face legal and valid according to its stipulations; or by legal construction, is it fraudulent and void? No evidence is furnished of the execution of the instrument, except by the assignors; their
Evidence of the execution by the assignees, may be dispensed with, and the fact of their assent presumed; or if it be otherwise, Chancery is competent to remove the difficulty by compelling them to appropriate the funds according to the directions of the trust. If the assignment was absolute for the payment of all or any portion of the creditors, without requiring their release or assent as a condition precedent, then as they could have no inducement to refuse, their assent might be presumed, as was done in the case of Brooks v. Marbury.
In a case decided in the Supreme Court of Kentucky, as late as 1834, M'Kinley v. M'Clombs,
It is true the sum of $300, appears to have been appropriated by the deed to the payment of Clark, of Augusta; the language is rather ambiguous whether this was absolute, or on the condition prescribed for the other creditors, that he should execute the deed; but admitting it was absolute, can it be tolerated for a moment that an assignment in trust for the payment.of several hundred thousand dollars, can be preserved from the fraudulent taint by a specious pretext securing the contemptible sum of $300? The schedule annexed to the deed, purports to contain an inventory of only the favorite creditors, and exhibits debts in their favor, to the amount of about $200,000!! Whether any of these debts have a real existence, or are merely fictitious, is equally destitute of proof, or even an affidavit by the garnishees, or any of the parties to the deed, or other person. It may, however, be assumed against those claiming under the deed, from the amount of debts inventoried, and various other indications, that this was one of the most extensive mercantile establishments in the United States. But whether the estate purporting to be assigned was of the value of $100,000 or a $1,000,000, is equally uncertain. What kind of property, what proportion of land, or personal estate, or where it is to be found, is left equally doubtful. No article of property is described, nor is the name given of a single debtor to the firm.
The execution of the deed by the creditors, or their assent otherwise given to its terms, would constitute a waiver of these objections as to them; but the position ! assume, is. that this deed is not shewn to have been assented to by any creditor: also, if it were shewn that the creditors who purport to have joined in the execution, have in fact done so, and that they were bona fide creditors for the respective sums mentioned, yet as their just demands may not equal half the value of the estate, and as the assignors have
2. It remains to be considered whether the deed, according to the terms it purports, is legal and valid; or by legal construction is it fraudulent and void?
The late decision of the Supreme Court of the United States, in the case of Brooks v. Marbury,
In reference to the expressions of the Chief Justice, as to the necessity of the assent of the cestui que trust, the same remark applies, that was used by him in the same case in allusion to certain remarks of Chancellor Kent, “that they must undoubtedly be understood in reference to the case in which they were used.” His language entirely excludes the idea that in no case was the assent necessary to the validity of the deed, but he gives ample reasons why the assent should be presumed in that case; that as the preferred creditors were the innocent holders of forged notes, thej’- would doubtless be willing to receive payment from any source. And compared with this oase, other reasons equally strong may be added. The condition of their assent was not a release of all claims on the person of the debtor, or such parts of his estate as might be fraudulently concealed, or which he might afterwards acquire, as is the case here. And in that case, the assigned property being designated and described, the creditor could scrutinize -the assignment and ascertain the faith in which it was executed. Here they are left without the slightest estimate or description of the amount, kind or locality of the assigned property, except that it is all the personal estate, claims or demands, and all the lands in Georgia and Alabama, which the firm owned jointly, but not individually. Hence a creditor who might wish to examine the motive for the assignment, and the prospect of payment under it, so as to make his election, whether to join in the execution of the deed or not, must roam through the United States, without the usual and necessary-means of making the discovery.
And in this place it is necessary to notice what I consider a prominent objection to this deed; it expressly excepts, from its operation, all the separate or individual property, belonging to each of the persons composing the firm: Who can say, their separate property does not exceed the value of their joint estate, or that it does not bear a large relative proportion to it; or that they did not preparatory to this assignment, use the precaution to have no individual debts, and increase their separate property out of the joint stock? It is a rational presumption that their separate property is sufficient to constitute a reservation, which, if expressed in
By the rule of decision which has uniformly prevailed in Connecticut, assignments less exceptionable than this, have been adjudged fraudulent and void, as to creditors who do not assent to the terms. The principles of a case reported in 4 Day, 146, were these, “A., being in failing circumstances, executed a deed of assignment of certain credits to B. In trust, for the payment of all A’s creditors, in proportion to theif respective claims. Two schedules were annexed, the first specifying the names of several creditors, and concluding thus: “and others, to the number of about twenty creditors.” The other specifying several debtors, with the amount of' their respective debts, and concluding thus: “and.many more to the amount of more than @10,000.” That assignment was made bona fide? and due notice given to the creditors. The creditors named in the schedule, had no knowledge of the assignment at the time it.was made, hut none of them afterwards dissent* ed, except C. who did dissent. B.- was agent to a number ofthe creditors; he accepted the trust, and proceeded to make collections. It was held, that the assignment was void in law, and that C. was entitled to recover the credits assigned by process of foreign attachment.”
In the Courts ofNew-York, a doctrine has prevailed more favorable to assignments in trust for the payment of preferred creditors, than in any other tribunal of equal authority. But even there, I think the principle has not been carried so far as to sustain this deed, supposing it in fact to have been executed by the persons who purport to have signed it as creditors,
CaSe Hyslop v. Clark,
It was, however, held in the case of Murry v. Riggs,
But in a subsequent case, Austin v. Bell.
The Supreme Court of Massachusetts, in the case of Ingraham v. Geyer,
On the other question raised in the argument, whether a voluntary assignment for the benefit of creditors valid by the lex loci, can affect the rights of creditors in another State or nation, than where made, I decline the expression of any opinion at present, as it could avail nothing in this case, and is considered by many of the first jurists as an important, and unsettled question of international law.
But for the reasons that the deed is not shewn, or in any manner avered to have been executed by either of the assignees or creditors; that the plaintiff and many other creditors have refused their assent, which was required to entitle them to any interest in the deed, and could only be given on terms of releasing their demands against the debtors, that all the individual property of the debtors, as well as any real estate owned by them jointly, except in the two States, is reserved, and because no estimate, inventory or
Judgment affirmed.
7 Whea. 53G.
2 Kent’s Com. 421. Pease v. Owen, 2 Hayw. 234.
7 Whea.558.
Hatch v. Smith,5 Mass 42, Putnam v. Dutch, 8Mass 287, Widgery v. Haskell 5 Mass. Stevens v. Bell, 6 Mas 339, Thomas v. Goodwin, 12 Blass. 141, Cushing v. Gore, 15Mass 74,Hendrick v. Robinson, 2John.Ch.R. 283 M‘Hemony v. Ferreis, 3 Johns. 72, Murray v. Riggs,15 J.R. 571, Austin v. Bell, 20 John. 442, Wilt v. Franklin, 1 Bin. 502 514, Marbury v. Brooks, 7 Whea. 556.
. 2 Kent.Com. 421.
Mandersly v. Park and Beckwith, 1 H. Bla. 680. Homes v. Remson, 20 John. 254, Platt's opinion.
4th Edit 573.
5 CraucR 289.
Milner v. Moyeton, 6 Bin. 353. Taylor v. Gear, 1 Kirby 313, Wallis &c v. Patterson, 2 Harris and M'Henry 463, 13 Mass. 146, 2 Hayw. 24, 12 Whea.213
4th Edil. 57S
. 4 John. Ch. 460.
3 Mass. 577.
Laws of Ala. 17'
7 & 11 Whea.
. i Monroe’s ltM'
14 John. 49G.
14 John. R. 458
15 j0jm. r7 571.