Pike v. Bacon

The opinion of the Court was afterwards drawn up by Tenney J. — Assignments, to be valid under the statute passed April 1, 1836, must provide for an equal distribution among such of the creditors as become parties thereto, after the required notice and within three months, in proportion to their respective claims, of all the assignor’s estate, real and personal, excepting what is exempt by law from attachment. They must be such, that no creditor shall in any respect stand preferred to another; they must be so made, that they eifectu284 . ally secure the object contemplated in the act; otherwise they are entirely void, and can have no legal operation. It is insisted, that the Judge, who presided in the trial of the case at bar, gave an erroneous construction to the assignment, when he instructed the juiy, that they would regard it as purporting to convey all the property, of the assignors, which the law required. It is contended that it does not convey the whole, ánd an attempt is made to show, that it comes within the principle established by the Court in the case of Driscoll v. Fiske, 21 Pick. 503. In that, the assignment, was sufficiently broad in its terms, to embrace the property in dispute, which had been attached by the defendant. ' But certain classes of the assignors’effects,. and ' only such, were referred to in the schedule ; and when in pursuance of the terms of the instrument, more perfect schedules were made, after full opportunity was had to include and specify every thing, and when they were submitted to the creditors, the property in controversy was not referred to. No expectation on the part of the assignee, or the creditors, that' any other than that specified and valued in the amended schedule was intended to. be embraced, could be entertained from any thing in the instrument itself. The property described was all represented as partnership property; The goods in dispute belonged exclusively to one of the firm. The Court say, “ If the separate property of each partner was intended to be included, it would seem a most unaccountable neglect, not to say so in the schedule- there annexed.” .In this case, that class of the effects of the assignors, which it is said was not embraced in the schedule, is .expressly referred' to in the assignment as being one class, viz. “ Books of accounts.” And in the schedule, purporting on its face, as well as in the assignment, to be imperfect, the same class is specified as being “ sundry debts due P. & B. Cromett on their books of accounts, amounting to a small sum.” Can it be doubted that it was the intention . of the assignors, so far as that intention can be ascertained from the paper, to give to their creditors the benefit of these claims ? Is. there any thing indicative of a disposition to conceal them from the knowledge [285] of all, who were interested in their affairs, and to retain them for their own use, or for the benefit of favored creditors ? Could there be any doubt that the books of accounts were a part of the fund appropriated for those who, as creditors, should become parties to the transaction ? We think the assignment embraces this portion of the assignors’ effects, and authorized and required the plaintiff, when he accepted the trust, to take them into his possession, and that the schedule itself is fully expressive of such an intention in the assignors. There are indications of haste in the execution of the papers, but because there was provision made, that the description of the property assigned might be enlarged or diminished in amount and value, as a particular and minute survey thereof would justify, we do not think the conclusion is to be drawn in lato, that the assignment did not embrace the entire prop.erty of the assignors. It was all put under the control of the assignee, and this provision seems to have been intended for the purpose of correcting any mistake which might have occurred. The haste of the transaction, and the imperfect state in which the business was left, were circumstances for the jury to consider, in ascertaining the intention of the parties. If any thing referred to in the assignment or schedule, either generally or particularly, was retained by the assignors, as it is said there was, it could have no effect to render void the instrument previously executed in good faith. There could be no right in them to retain such property, and the assignee was vested with full power to take it into his possession, and his duty required him so to do. When the contract was executed by all the parties thereto, the rights of the creditors,- whose names were affixed, had attached, and misconduct in either of the other parties, or both, could not defeat them, provided the transaction was bona fide. If the assignment was duly made and executed, and was for the purpose intended in the statute, the law is answered. The inducements which may have led thereto, are not to be inquired into, if the ultimate object is secured. The wish of debtors to prevent expense by reason of attachments of their [286] property, previously entertained, cannot take from creditors, who execute the assignment, the advantages intended to be secured thereby. The benefit to them provided for in the statute, would be very uncertain, if the motives of the assignors, unknown to the other parties, when the instrument was executed, could deprive them of it. It could not have escaped the attention of the legislature, that those debtors, who would probably resort to the act, would be persons, apprehensive that their property might be attached, who would wish to avoid the expense consequent thereon. And it is reasonable to suppose, that the legislature intended at the same time to present to insolvent debtors the means and the inducements, to make an equal distribution of their effects among all their creditors. If this intention is fulfilled, the whole design is accomplished. It is with the act of the party, and not the secret springs which prompted it, that we have to do. The jury were instructed, that if the .assignment was not made for the purpose of securing an equal distribution among all their creditors, but was made to secure to themselves a benefit by a reservation of any part of the property, it would be void; that there must be a fair and full compliance with the statute. We think the instructions were unobjectionable.. Neither do we think the Judge erred in declining to instruct the jury “ that if any deception was used to the agent of one of the attaching creditors, whom the defendant represents, by Miss Cromett, to delay him until an assignment could be made, it would make it fraudulent as to that creditor. If the assignment was legally and fairly made, and creditors obtained a benefit therefrom, we do not see how their rights can be divested by proof of any stratagem practised by the assignors to prevent attachments, till this object could be secured. If no attachments were made, a fraud even, practised by the debtors to prevent it, would give the creditor no lien upon the property; nothwithstanding the grossest dishonesty-of this kind, it would remain as it was; and as long as it continued the property of the debtors, unaffected by any attachments, no fraudulent conduct, to impose upon a creditor, and keep him [287] at bay, would disqualify them from making a bona fide assignment under the statute for the benefit of all their creditors. Another objection urged is, that the assignment purports to be executed in the name of the debtors’ firm, and only one seal is affixed. If the evidence here stopped, we might conclude that only one of the partners was a party to the instrument, and that the firm would not be bound thereby. But it is acknowledged by both, as appears by the certificate of the magistrate before whom the acknowledgement was made. It is well settled, that an instrument executed by one of a copartnership in the name of the firm, and one seal only affixed, and this by the consent of the other, or if there be a subsequent ratification, which may be proved by parol, it is sufficient to bind the firm. All this appears, and this objection is overruled. Cady v. Shepherd & al. 11 Pick. 400, and the cases there cited. Judgment on the verdict. Note. — See Paine v. Tucker, ante, p. 338.