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JULY 1829.

the benefit of Scottish creditors; and in turn, they will not

in England, permit a Scottish creditor to come in under Robinson

the assignment for a share of the bankrupt's estate, unless Rapelye and their priorities at home be relinquished. That an assignSmith.

ment under the bankrupt laws of a foreign State, would not be supported here against our own attaching creditors, can

not at this day be controverted upon principle or authora Topham v. ity.a Chapman. 1 Const. Rep.

One objection to voluntary assignments like this, is, 229, 20 Johns that they may be used in aid of foreign bankrupt laws, and Rep. 229. 259. if enforced here against our own creditors, every foreign 4 Day's Rep bankrupt may establish and dictate to our citizens, an in146. 5 Mass. dividual bankrupt law of his own. Support this assign5 Cranch 289. ment against our attaching creditors, and you send our own 6 Binney 353. citizens abroad to collect their debts: you permit interest4. Johns. Ch. Rep. 460. ed foreign merchants to change the party liable, and no

summary mode of redress against fraudulent assignees exists in such cases, as in cases of bankruptcy. Nor can it be expected, in general, that such voluntary assignments, where the assignees are chosen by the bankrupt himself, will be conducted with the same propriety and justice, as assignments under the foreign bankrupt laws. It would consequently be more dangerous for our Courts to sustain

voluntary assignments like the present, than to adopt and 04 Day's Rep. enforce the bankrupt laws of foreign States. Voluntary 146. Mass assignments in England of the character of the one now under 13 Mass. Rep. consideration, are void, because they operate against the poli1:46. 17. Mass cy of the bankrupt laws. They should be held void here,

when made abroad, because they operate against the policy of our attachment laws, which allow a citizen to attach the effects here, of a non resident, to satisfy his demands.

The deed of assignment itself is void and fraudulent as to creditors. An assignment made of all the effects of the assignor is fraudulent if it reserves a trust to the assignor. Now the assignment in question contains a trust for the benefit of the assignors; the effects assigned, are according to the deed of assignment, to be appropriated to the pay ment of such creditors as shall sign the deed, release, &c. in certain periods mentioned. No creditors who do not make themselves parties to the deed and release, are to be paid any thing. Now suppose no creditor chooses to accept the terms offered in such an assignment, or only a few, upon a secret understanding, and whose debts would consume but a small share of the property assigned, I would ask if the property assigned, or the surplus, would not be

JULY 1920.



672. Phenix

hell hy the assignees for the use of the assignors? If an assignment like the present could be supported, it would be easy to place property out of the reach of creditors; only assign your effects to a pliant trustee, upon an agreement Rapelye, and with all your creclitors except the one intended to be fleeced, that they will not become parties to the deed, and then, if the terms prescribed in the deed be so unreasonable that the intended victim will not accept them, the property assigned, no matter where it may be situated, is effectually put beyond his reach.

The proof of the execution of the instrument is insufficient to authorize this Court to recognize it; the making, sealing and delivery of the deed, is not established according to the rules of law.

HITCIICOCK and ELLIOTT, for the defendants in error, argued that the deed of assignment was not void or fraud

a Marbury v. ulent in law, and that a debtor could legally prefer one creditor to another; that wherever, according to the English authorities, assignments not fraudulent in point of fact v. assignees have been set aside, in consequence of the preference giv- sf Ingrahamn, en hy the debtor in embarrassed or insolvent circumstan- 412. 3 Johne. ces, to a particular creditor or creditors, it was in cases in Rep.72.

20 Johns. 229. which their Courts invariably assumed the position that the assignment was executed contrary to the spirit of, or in contravention of the provisions of the bankrupt law of Eagland;" that issues not having been tendered to contro

Brown, vert the shewing made, or the facts stated in the answer of 3 Enst. 125,

Ingliss et al. the garnishces, that all the facts stated in the answer were

v. Grant, to be taken as true, and that therefore the plaintiffs were 5 Ternu 530. precluded from contending that the parties were under any gan, 1 stew: legal disability, or that the deed was not duly executed, arts R.9. or that it was not supported by adequate consideration, or in a word, that it was fraudulent; because the answer was not traversed. They further argued, that no judgment could be rendered against the garnishees, nor against the defendants in attachment, because, unless the garnishces were liable, the process of attachment being a proceeding in rem, there was nothing subject to the attachment upon which a judgment could be legally predicated; and that 13Jcbu. R.72. therefore, the judgment should be afirmed.

KELLY, in conclusion.

The cause was argued at the July term, 1923, of the Court, and held under advisement, and after a second argu

6 Potter v.

v. Mor.

JULY 1:0.

ment at this term, the opinion of the majority of the Court

was delivered Robinson. Repelye and By JUDGE COLLIER. On the answers of the garSmith.

nishees, 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 decd, 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 cxecute 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; is they had refused, equity could appoint others in their stead, with

all powers which the deed conferred.a a7 Whea. 356.

But the deed purports to have been executed by the assignors, assignees, and some of the creditors; and were it necessary, we might presume an execution by all the

parties whose names appear, and more especially by the Peuse v. Ow- creditors, as it is for their benefit.b It is however unnecesken, 2 Hayv.

sary to resort to presumption, for the answer of the gar

62 Kent's Com. 421.


JULY 1829.



nishees must be regarded as strictly true; and even if the deed be disregarded, no judgment can be rendered against

Robinson them on their answers, because they state they have been advised that the assignors have transferred their claims Repelve and against them. We must take the assignment to have been legal, unless its illegality appeared from the answers, or from the deed accompanying them, or had been made manifest by the finding of a jury on an issue taken on the answers. This doctrine was settled by this Court in Allen v. Morgan, at January term, 1527. And as no issue was taken on the answer of the garnishees, if it were necessary, from the circumstance of the deed appearing to have been executed, we would presume a delivery of the property conveyed, as it recites the fact. But here the doctrine of presumption need not be invoked, for if no delivery has been made, the rights of the assenting creditors cannot be prejudiced, unless they dispenseel with it, or did some other act from which fraud is inferable. No act of the trustees can affect the assenting creditors, unless they in some degree contributed to it; because the trustees are only agents for the assignors.a The facts so far a7 When. 556.. as developed by the record, discover no improper conduct, by the assenting creditors.

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 conveyed should be described by metes and bounds; they can be identified by the title papers, which it is presumable were 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

JULY 1822.



12 Mass. 14

selves. But even suppose the title would not be good at

law, the powers of Chancery might be invoked against the Robinson

assignors, by a purchaser from the assignccs, and a decree Rapelye and obtained for a more perfect conveyance. It is even enough

if the deed passes the equitable interest in the lands; it is now well settled that such interests shall at law be protected from attachment.

It is a well ascertained rule of law, that the right of the debtor to control his property is full and complete, and not

subject to restraint by law, until the creditor acquires a a latch v. lien upon it. In countries where bankrupt laws obtain, a Smith,5 Mas different rule of jurisprudence prevails; it is there held, Dutch, 8Mures that the effects of the bankrupt must be distributed among 287, Widgery his creditors according to the provisions of a certain law, 5 Mass. Y, and that a distribution upon any other scale, would be a Steveny v.

fraud on it, and consequently void. Bell, 6 Mas) 339, Thoms The right of the debtor to dispose of his property being v. Goodwi!

then uncontrolable by law, where there is no lien already Cushing attaching in favor of the creditor; it follows necessarily that Gore, 13. he may secure the debt of one creditor in preference to an* Robinsof other, and that the security given cannot be prejudiced by

Joha.Ch. the insolvency of the debtor, if the creditor has not acted nyv. Ferreis, improperly in obtaining it. 2 Johns. 72, That the deed is the making of a bankrupt law, for the

v. Riggs,153.R. benefit of the assignors, is an argument which we think 571, Austin v. cannot be well founded. Before, with any degree of jusBell, 20 Joh. 412, Wilt v.

tice, it can be assimilated to a law, it would be proper to Franklin,

shew that it was compulsory upon the creditors: this we 1 Bin.502514, Narbury apprehend will not be insisted on.

The creditors may or Brooks, may not assent to its provisions; if they yield their assent, 7 Whea. 556.

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 not forced to assent. It seems to be the better opinion, that a debtor may indirectly exercise a coercion over his creditors, by

requiring them, if they take a benefit under the deed, 12 Kent.Com. to give a release. The cominentator refers to authori421.

ty, and none that we have seen maintains the converse of the position.

The counsel of the plaintiff insist, that the assignors had no greater control over their property, without the jurisdic

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