Lea's Appeal

Burnside, J. The question presented in this ease is, whether a debtor who by deed conveys all his property to assignees for the benefit of his creditors, can stipulate for a [506] release, since the passage of the “ act to prevent preferences in assignments,” April 17, 1843, p. 273; Dunl. 896. The act declares “ that all assignments of the property in trust, which shall hereafter he made by debtors to trustees on account of inability, at the time of the assignment, to pay their debts, to prefer one or more creditors (except for the payment of wages of labour), shall be held and construed to enure to the benefit of all the creditors, in proportion to their respective demands; and all such assignments shall be subject, in all respects, to the laws now in force relative to voluntary assignments.” The law then in force, and well settled, allowed the debtor to stipulate for a release, even when he had given preferences in his assignment: Lippincott v. Barker, 2 Binn. 174; 4 Wash. C. 232; Schuylkill Nav. Co. App., 2 Barr, 148, n. When the act was passed, the law was settled and long held, that a preference given to one or more creditors, in exclusion of the rest, was valid: 4 Dall. 85, in note; 2 Binn. 186; 13 S. & R.. 132. A careful examination of the act shows the legislature studiously avoided making any change in the law relating to voluntary assignments, as it was then understood and settled, except in the one particular, that there should be no preferences given in assignments, but in every other respect they should be subject to the law then in force. The act did not make the assignment void, but said it should be held and construed for the benefit of the creditors. This is the only provision in the act. Hence, in Blakey’s Appeal, 7 Barr, 449, it was held that judgments confessed to secure creditors are not such preferences as are avoided by the act of 1843, although an assignment for creditors was intended, and was shortly afterwards executed. This case goes far in principle to settle the case under consideration. The legislature knew that the stipulation for a release was in accordance with the spirit of the bankrupt laws of the commercial world, and with the spirit of the age, that where an unfortunate debtor surrenders all his property to his creditors for their benefit, he ought to be allowed to begin the world again untrammelled, for his own benefit and that of his family. They made but the one provision in the act; and to prevent a latitudinarian construction of this one, they declared that all such assignments shall be subject, in all respects, to the laws now in force relative to voluntary assignments. If these creditors all released there would be no preference, and each determines for himself whether he will accept of the terms of the deed of assignment, it having been settled in the Schuylkill Navigation [507] Company’s Appeal, that no creditor should be allowed a dividend who did not release. We therefore think the auditor and the court were in error. They ought to have awarded the whole fund to the releasing creditors. In all eases where a release is required, a reasonable and fair opportunity is to be given by the requirements of his deed to come in and release, or the assignment would be fraudulent. We cannot say that such an opportunity was not given in this case. Decree reversed, and record remanded.