24 Barb. 105 | N.Y. Sup. Ct. | 1857
The defendant Robert A. Forsyth takes, in this case, a preliminary point; that the plaintiff, on his own showing, is not entitled to any relief, even if the assign
In the case before us, the averments are, that on the 13th Sept. 1853, James C. Forsyth (the assignor) had certain real estate, which is particularly described; that on that day the plaintiff commenced an action against him, and in it sued out of this court an attachment against the property of said Forsyth, as an absconding debtor, and caused the same to be delivered to the sheriff of Ulster county, (where the lands are situated,) and that said sheriff did immediately attach the specified real estate as the real estate of said James 0.; that, in his said action, the plaintiff obtained judgment against said James 0. on the 23d of January, 1854; docketed the same in Ulster county the 24th of January, 1854, and issued his execution thereon the 25th of January, 1854 ; on which execution said sheriff made, out of the attached personal property of said James C., some $8000 and over, “ and that there still remains due and unpaid' on said judgment about $2000;” and that said James 0. “ has no personal property in Ulster county from which any part of the balance of said judgment can be made.” The plaintiff proceeds to say that, on the 24th of August, 1853, said James O. made the assignment in question, purporting to convey to his assignee, Robert A. Forsyth, this specific real estate; that under that
I give no weight to the defendant’s claim, that there is no averment that James C. was ever seised of this real estate after September 13, 1853 ; because it is entirely clear, (Code, § 237, division 2,) that the plaintiff having obtained judgment in the action in which the attachment was issued, and ah execution having been issued thereon, and a balance remaining due after the application of the attached personal property, the sheriff can sell so much of this real estate attached as may be necessary to satisfy that balance. These provisions make entirely certain the rule, that such a judgment, when obtained, for its lien on both the personal and real estate attached, relates back to the time of levying the attachment; taking its priority from that date.
The complaint in this suit, however, can have effect in no other view, than the one above set forth as answered by the preliminary objection of the defendant R. A. Forsyth. Since it is not the usual creditor's bill of the old practice, to which the return of an execution unsatisfied was an absolute condition precedent; while this execution is not returned at all: nor is it
There is one other controlling view of this case; and as it is ' one that is rather to be gathered from several cases, than to be found clearly decided in any one suit, it is best to consider it here, independently of the previous ground, and as if the complaint made a case entitling the plaintiff to the relief he would like to have. And as this view is based entirely on the statute, it is necessary to see precisely what the statute is, as well as to consider what was the common law, without and before any statute on the subject.
The statute is, (2 R. S. p. 137, margin, § 1,) that “ every conveyance, or assignment of any estate or interest in lands, &c., made with intent to hinder, delay or defraud creditors, or other persons, &c., as against the persons so hindered, delayed or defrauded, shall be void.” In the face of this statute—too plain to admit of doubt—it will not do to say that honesty of purpose in the assignee, has any effect whatever on the intent of the assignor ; and this latter is the intent with which the assignment is made. lie makes the assignment, and no one else: and the making intent is his, and no one’s else. There is no need of referring to authority on such a point; but it has been so decided, (see 18 Barb. 272-4.)
Nor, on the other hand, is it in the least degree material to the question of thevalidity of the assignment, to ask ivhat other acisbesides making the assignment, the assignor has done; or how fraudulent or otherwise those other acts are. A very dishonest man may make an honest assignment; and a very honest man may make one that the law will pronounce fraudulent and void. But, in
Now, at common law, a debtor could pay a debt by a transfer of property, real or personal, as well as by counting out the silver. And he could so transfer, or pay, to one person for the use or benefit of another who was his creditor, or of two others, creditors. And he could, in either way, pay one creditor instead of, or in preference to another. And this, whether he was solvent or insolvent. I am aware that this has, once, been styled (while conceding it to be the common law,) an “ iniquitous principle of the common law,” (citation in 10 Paige, 229.) But with all due deference to the judge who ventured that remark, I must say that I do not see how common law principles could be shaped to general ends in any other way. To make a different general rule, would be to take away a man’s rights over his own property, while it remains his own; and to vest, somewhere, an authority perfectly inquisitorial. If there were found, resulting from the general rule, a particular mischief, there could be, by statute, a particular remedy applied; as there has been. To apply this remedy, have been passed the
The case in 6 Hill, 438, was where a debtor assigned “ nearly all” his property, for the payment of four of his creditors ; providing that any surplus after paying those four debts, should go to the use of the assignor, he being insolvent. And the. assignment was held bad on that ground. But it is supposed that Mr. Justice Bronson, in giving the opinion of the court, and (at page 439, 40) while putting it expressly on that ground, states views against all assignments giving preferences ; and really holds that all one’s property must be assigned, or the assignment will be bad, when he says such assignments are allowed td'stand only where the debtor “ makes an unconditional surrender of his effects, for the benefit of those to whom they rightfully belong;” citing several cases. Of these cases, the principal and far the strongest one, containing reviews and citations of all his others, is 11 Wend. 587. And by turning to this case and examining it, with its references, we shall probably be able to arrive at such basis as there is for such a hold
First, in date, of those references, is 2 P. Wms. 427 ; there a party, not having committed any act of bankruptcy, to bring him within that statute, assigned part of his property to a particular creditor to pay his debt; (which was held good;) and that case is so far from holding that to make it valid the assignment should have been of all the debtor’s property, that it holds, expressly, that had it been of the whole, it would for that reason have been void. And that case says, “ there is no such thing as an equitable bankruptcy; it must be a legal one” (to give the statute effect;) and there may be a reason for a bankrupt to prefer one creditor before anotherand further, it holds that if a chose in action were so assigned, and the assignee were thereby obliged to come into a court of equity to enforce it, the court of equity would enforce it. The next case cited is 1 Atkyns, 154, (marginal page.) This was also a partial assignment, to pay a particular debt; and there was no decision in the case. But the issues, settled to be tried, referred to the date of the assign- or’s “ bankruptcyand to the actual transfer prior to that date; the reasoning, and the reporter’s note of the case, going to sustain the assignment. The reasoning is Lord Hardwicke’s. We next find 5 Term Rep. 234. 424. At page 234 it is held, (and that is the whole case,) that a confession of judgment to one creditor, whereby he obtained two hours’ priority of levy, and thereby a preference over another creditor, was not fraudulent, within the statute against “ delaying, hindering or defrauding” creditors, and that statute covers judgments by confession; though made with the express intent to give the preference. And at page 424, though the case is one of a partial assignment. giving preferences, and really does not meet the point under discussion, although the assignment was held good, it is said by Lord Kenyon, “ it is neither illegal nor immoral to prefer one set of creditors to another. It was never held, even in the case of a trader, that he could not give a preference in some respects, provided the property he set apart for the payment of one or more favorite creditors, did not exhaust his whole estate;
Turn now to the case specially relied on, 11 Wend. 187. It was a case in the, same court, (for the correction of errors ;) and the actual decision (p. 225, 6) is, “ that the assignment is void, because it makes the preference given to the creditors of the assignors, designated as class No. 2, to depend on the condition that the preferred creditors shall give the assignors an absolute discharge from their debts.” And this was, actually, the only point in the case : and the first paragraph of the reporter’s head note is not in the decision. It might seem (at page 194) to be found in the opinion of Mr. Justice Sutherland, where he says, “ it is perfectly settled, both in England and this country, that a debtor in failing circumstances has a right to prefer one cred
It must follow, from the conclusions already stated, that the assignment of Jas. C. Forsyth, (either independent of the statute, or under it,) although it gave preferences, and did not assign all his property, would not be for that reason void. And as he was not bound to assign all his property to make his assignment valid, so his assignment is not necessarily rendered invalid by his failing to deliver all of his personal property to the assignee, though none is excepted on the face of the paper. It is true that to give full effect to an assignment of personal property, delivery of the assigned property, and a continued
All an assignor’s acts, connected with, or coincident in time with, his assignment, may generally be inquired into; because the law allows the greatest latitude, in searching for evidences of a fraud, which from the nature of the case, must be confined almost exclusively within the assignor’s bosom. But to make the instrument void, when not so on its face, as matter of law, the fact of a fraudulent intent in making it, must be found, and found legitimately, from evidence that will fairly support the finding; and it must be, also, an intent to commit a fraud on creditors by making the assignment; and not by some entirely independent act, which might, and probably would, have been done precisely as it was, had no assignment been made or dreamed of.
As this court understand the law to be, the charge given at the circuit is certainly erroneous, where it says, that unless the assignor surrendered to the assignee all the property which he had, liable to execution, at the time of executing the assignment, the assignment is void; and that if J. 0. F. did not deliver over all his property to the assignee, the assignment is void. It is also erroneous in saying that if J. 0. F. carried off this $5000 or the bag of gold, whatever it may have contained, the assignment in question cannot be upheld ; and that it became the duty of the jury to find that it was executed with intent to hinder, delay and defraud creditors. It is also erroneous
A new trial must be ordered.
Wm. B. Wright, Harris and Gould, Justices.]
It must be borne in mind that I speak for this case, and the principles it involves; and that, therefore, what I say is spoken in reference only to voluntary assignments in trust to pay debts: not as to conveyances of an actual estate to, and for, the grantee ; (which latter are the cases of most of the English authorities as to fraudulent conveyances.) In England, and here, where the estate and benefit are to and for the grantee, (of a deed of a farm to A. for a price, or to pay a debt to him;) the bona fides of the grantee may and does operate to make good a conveyance which the grantor intended to help him to delay and defraud other creditors.