Cropper v. Gorham

Carroll, J. These two actions were tried together. The question in each case is the validity of a common law assignment for the benefit of creditors. On January 18, 1913, Thomas Carder, while insolvent, made an [124] assignment under seal “of all goods, wares, merchandise, . . . and all book accounts” to Joseph Walker, a creditor to whom he was indebted in the sum of $3,500, as trustee for the benefit of his creditors. On January 20 of the same year Walker signed the instrument as trustee and at the same time signed as a creditor, releasing his claim against Carder in these words, “hereby release the said Thomas Carder from all claims and demands of every name and nature, owing from said Carter to us.” Seven other creditors of the assignor became parties to the deed of assignment and release, “some of them signed immediately,” although one of them did not sign until two months afterwards. Each of the defendants was indebted to the assignor and the amount of the indebtedness was not in dispute. The conveyance of the debtor’s property was founded on a valuable consideration. He was indebted to the assignee. The instrument was under seal, and by executing the deed of assignment the assignee became bound by its terms. Such an assignment is valid against subsequent attaching creditors, and the case is governed by Reddy v. Raymond, 194 Mass. 367. The deed of assignment became effective as soon as it was executed by the assignor and by the trustee who was a creditor. It was not necessary to have the consent of all the creditors in order to make it legal; Everett v. Walcott, 15 Pick. 94; and it was not contended that the assets in the hands of the assignee were sufficient to satisfy the claims of assenting creditors. Douglas v. Simpson, 121 Mass. 281. The evidence of Carder that he understood the assignment to be for the benefit of some of his creditors, and not for the benefit of all, even if the evidence was admissible, does not affect the true meaning and construction of the document. The rights of all the parties were governed by the written instrument and its construction was for the court. In the absence of some statutory prohibition, a debtor has the common law right to make an assignment for the benefit of some or all of his creditors, and when fully executed it can be set aside only by proceedings in bankruptcy. “ It is true that the assignment could have been avoided by proceedings in bankruptcy seasonably begun or by attaching creditors before it has been fully executed; not however because it was necessarily in fraud of creditors, but in the former case be [125] cause it is the policy of the law to take the distribution of bankrupt estates into its own hands, and in the latter case because until executed by one or more creditors the deed was ineffectual and the property remained the property of the debtor and was attachable as such. ” Morton, J., in Reddy v. Raymond, 194 Mass. 367, 369. See Banfield v. Whipple, 14 Allen, 13. It was not necessary to give notice of the assignment to the debtors of the assignor. Thayer v. Daniels, 113 Mass. 129. Putnam v. Story, 132 Mass. 205. Kingman v. Perkins, 105 Mass. 111. While continued possession by the assignor of the goods conveyed to the assignee oftentimes is sufficient evidence of fraud, it is not conclusive under the circumstances disclosed by the evidence. Rice v. Cunningham, 116 Mass. 466, 470. The instructions of the presiding judge were sufficient and accurate and the requests of Cropper were properly refused. Exceptions overruled.