26 F. Cas. 1127 | U.S. Circuit Court for the District of Maine | 1838
Taking the case to be, as the parties at the argument have assumed it to be, that the conveyances made to McLellan and Moody respectively were, what they purport to be, bona fide conveyances, for a valuable consideration, without any knowledge or belief of the existence of any debts due to the United States, or any intention to defeat the priority of the United States; and that they embraced all the property of Gooding, except what is exempted by
But let us take the case as if so presented; and the question then comes to this; whether the assignment contemplated by the act is an assignment to one creditor for the payment of his own debts, or as a security or discharge of his own liabilities, or whether it must be an assignment for creditors in general. It appears to me, that the latter is "the true and natural, if not the neeessary, purport of the words of the act. The assignment is to be a voluntary assignment of all his property “for the benefit of his or her creditors.” Now it seems to me that the word “creditors” here is used in contradistinction to a single creditor. If it does not mean all his or her creditors, it at least means a conveyance for more persons than the creditor or creditors, who are the immediate assignees, for their own debts. The language seems to indicate an assignment made to some person or persons as trustees for the benefit of the creditors of the assignor, and not for the sole benefit of the assignees It would be unusual language to speak of an assignment made for the -benefit of the grantees only, as an assignment “for the benefit of creditors.” If the conveyance were absolute to them, they would take, not as creditors, but as purchasers- not for the benefit of creditors, but for the benefit of themselves, as grantees. It would be still more unusual language to speak of an assignment to the assignees, as a security for the liabilities for the debtor, to be an assignment “for the benefit of creditors.” It would be rather an indemnity against the claims of the creditors, and in opposition to them. Indeed, if one were disposed to refine upon the present case, the conveyance's were not assignments “for the benefit of creditors,” strictly so called; but. to a large extent, they must be deemed to be purchases by indorsers, and securities, upon a collateral contract by them, to pay the debts, for which they were under liability to the creditors out of their own funds. In Thelluson v. Smith, 2 Wheat. [15 U. S.] 426, the supreme court said: “If,therefore, before the right of preference has accrued to the United States, the debtor has made a bonfi fide conveyance of his estate to a third person, or has mortgaged the same to secure a debt, or if his property has be.en seized under a fieri facias, the property is divested out of the debtor, and cannot be made liable to the United States.” Now, it is observable, that this language was used in a case, where there was a prior lien by judgment upon all the debtor’s property. And in that case, as well as in Conard v. Atlantic Ins. Co., 1 Pet. [26 U. S.] 386, 441, the supreme court held, that the priority of the United States would not, even where there had been a general assignment for the benefit of creditors, divest an antecedent mortgage or lien for a debt; and that the priority was not itself in the nature of a lien on the debtor’s property. He might still convey it bonfi fide to any creditor or purchaser for a valuable consideration, although he should happen at the time to be, in the general sense of the term, insolvent. In this view of the construction of the language and intent of the section of 1799, now in question, I confess myself to be of opinion, that the conveyances in the present case are not voluntary assignments for the benefit of creditors in the sense of that section.
The only doubt, which has occurred to my mind, has arisen from the language used by my brother, Mr. Justice Washington, in bis charge to the jury, in the case of Conard v. Nicholl, 4 Pet. [29 U. S.] 291, which was brought under the review of the supreme court, and so far as it was necessary to be considered by that court, that is. so far as it was or might be prejudicial to the plaintiff in error, was affirmed by the court. So far as it laid down the law favorably to the rights of the United States, it was not strictly within the cognizance of the supreme court, and could be reexamined only upon a writ of error brought by the other party. In the course of his charge Mr. Justice Washington puf these questions to the jury, (1.) “Was Edward Thompson (the debtor) insolvent, and unable to pay all his debts at the time when these securities were given to the plaintiff? (2.) Did they divest him of all his property, or, if .not, was the part reserved trivial, with the intent to defeat the rights of preference of the United States? If these facts are proved to your satisfaction, then the transfers are to be considered as constructively divesting Edward Thompson of all his property, so as to let in the priority of the United States against the plaintiff.” Now, it is observable, that here the learned judge does not put the case upon the mere fact, that the debtor was insolvent at the time of the transfer of the property, and that they covered all the debt- or’s estate; but he adds the fact, that the
I take the naked question, then, • stripped of all unimportant circumstances, to be, whether a conveyance by a debtor, known to be insolvent, of all his property, to one or more creditors, in. discharge of their own debts and liabilities, not exceeding the amount due to and payable by them, and not for the benefit of the creditors at large, or of any other creditors than the immediate grantees, is such a voluntary assignment, as is within the purview of the section of the act of 1799? That it is a case within the same mischief, as that against which the act meant to provide, I admit. That if the case had been wholly untouched by authority, there might have been strong ground to contend, that the three cases put in the act were rather illustrations of the meaning of the word insolvency, as used in the act, than exclusive limitations of its meaning, I also admit. But, looking to the decisions which have been made, I do not feel warranted in saying that such conveyances as the present are voluntary assignments for the benefit of creditors within the meaning of the act, unless, indeed, it could be shown that they wére made with the intent to evade the priority given by the act. I have not thought it necessary to rely on the act of the state of Maine, of April. 1836, respecting general assignments; because, after all, the construction of the act of 1799. c. 128, cannot depend upon the provisions of any particular statute of a state, which does not fall within its very terms. But this state act does in its provisions point to classes of cases, which seem to me to be the very cases, which the act of 1799, principally, if not exclusively, contemplated in the clause which has been under our consideration. Upon the whole, my opinion is that the bill ought to be dismissed.