Engelbert v. Blanjot

The opinion of the Court was delivered by Jones, J. The transfer of property is of common right: prima facie, therefore, every such transfer made and executed in due form of law is operative to pass the interest intended to be conveyed. The common law, however, will not give validity to transactions founded in fraud or immoral intention ; but the fraud must be shown by the party alleging it in order to defeat an act which is apparently valid. The statutes 13 and 27 Elizabeth, against frauds, go no further than the common law as it is now understood. They were not designed to invalidate fair transactions, but only to require, with a view to general utility, certain signs of innocence, or to supply certain artificial tests or badges of honesty, which it would be difficult, if not impossible, for fraud to assume. But the 5th section of the act of the 24tb of March 1818 has not the same object. One design of it was to give notice of the transaction ; and in this point of view it may be classed with a similar provision of the act of the 28th of May 1715, section 8, relative to the recording of mortgages. Another design of it was to furnish record evidence for the foundation of the proceedings to compel the assignees to settle their accounts provided by the previous sections of the act. It is however a provision in abridgement of common right, and ought not to be extended by construction. In the case at [227] bar fraud in fact is not alleged ; but the plaintiff claims to defeat a fair transaction by mere force of positive law. It appears to us that ihe voluntary assignment of Poulallier to the defendant is neither within the letter nor the spirit of the act of the 24th of March 1818. The 5th section, is confined to the cases described by the 1st section ; and the 1st section applies to cases of the assignment of the whole or part of the assignor’s estate in trust for the use of Ms creditors, or in trust for the use of the assignee and the other creditors of the assignor. The case under consideration is an assignment of a part of the estate of the assignor to the defendant, who was a creditor, in trust for the use of the defendant, and some of the other creditors of the assignor. It is contended by the plaintiff that it is not necessary, in order to bring the case within the 5th section, that the trust should be for the benefit of all the creditors of the assignor. It must be admitted, however, that the language of the act, grammatically considered, is comprehensive enough to embrace the case of an assignment made for the benefit of all the creditors of (he assignee; and the case of an assignment for the benefit of a part of the creditors is not expressly within the act, although in the clause under consideration the legislature provide for the case of a partial assignment in respect of the assignor’s estate. It should be observed also, that by the next clause of this section, the court may be required to issue a citation to the assignee upon the application of any of ihe creditors of the assignor. Now it cannot be supposed that the legislature intended to give ihe benefit of pros cess to any person not interested in the effects assigned ; and yet it is given expressly to any, therefore to all of the creditors of the assignor. If the legislature had intended to provide for cases like this, this provision would have been expressly limited to the persons interested in the assignment. No instance, it is believed, has occurred in which the courts have been called upon to compel an assignee, for the benefit of a part of the creditors, to account in the method pointed out by this act. If it could be done in this case, it might also be done in a case where one only of the creditors of the assignee has an interest in the effects assigned. Such a construction of the act would convert it into a mere method of proceeding between oue man and another, standing in the relation of trustee and cestui que trust. That such was not the view of the legislature is obvious from the supplements to this act. The requisition of notice in public [228] newspapers evidently intends the ease of persons who cannot be made parties to legal proceedings at the usual way; ami if the original act is applicable to assignments made for the benefit of certain persons specially named in the instrument, as the plaintiff contends, much of the details of these supplements would be without value and inconvenient. The other point raised by the defendant need not be decided in this case; and yet it seems decisive against the plaintiff. I will therefore merely add, that by the terms of the act of the 26th of March 1814, section 4, the trustee is vested with all the estate of the debtor at the lime'of his appointment. He comes therefore into the place of tfie debtor in respect to his property, rights and claims, and is bound by acts which would bind the debtor. This act contains no provision (corresponding with the 5th section of the act of the 4th o' December 1807 relative to domestic attachments) which enables the trustee to recover property which has been fraudulently conveyed. When therefore there have been fraudulent transfers, each creditor must pursue his remedy at the common law, or under the statues against fraud, and recover satisfaction as he might have done previously to this act. Krause v. Beitel, 3 Rawle 203, 204 ; Thompson v. Dougherty, 12 Serg. & Rawle 458 ; Ankrim v. Woodward, 4 Rawle 353, 354. A new trial in this case must be refused. Pettit, J., took no part in the judgment of the court, having been absent during the argument in consequence of indisposition. Rule discharged, (a) Footnotes [(a)] s) Bat see the act of the 14th of June 1836, section 1. Pamphlet Laws 630.