Morgan v. Bogue

Lakjü, J. The questions presented in this, case are raised by a general demurrer to the petition. That the relief demanded by the defendant in error is within the scope of equity cognizance is clear. Being a creditor of Morgan, and having recovered a judgment on his demand, to satisfy which he had caused the property in question to be seized in execution, he was in a situation to question the good faith of the assignment to Greene, and if it were found to be fraudulent to have it set aside as an impediment to the enforcement of his just legal rights. Buck v. Sherman et al., 2 Mich., 176. Beardsley Scythe Company v. Foster, 36 N. Y., 561. 2 Story Eq. Jur., Sec. 700. By the demurrer to the petition all facts properly-pleaded stand admitted. Thus it appears that Morgan, a short time prior to the rendition of the judgment in favor of the defendant in error, being at the time insolvent, made an assignment of all his personal effects to Greene, for the benefit of Millard, another of Morgan’s creditors, [433] whose claim was partially secured by a mortgage upon real estate, on which a decree of foreclosure had been entered more than a year before, but in which nothing further had been done. And it is further admitted that at the time of its assignment to Greene the property in question was in the possession of Morgan, where it remained, subject to his use and control, until taken in execution, at the instance of the defendant in error. The statutory presumption of fraud arising from this possession by the assignor is in no way rebutted. The fact that Millard, for whose benefit the assignment was ostensibly made, was a creditor of Morgan, although an important factor, is not enough to establish what the statute requires in such cases, that unless the person claiming under the assignment shall make it appear “ that the same was made in good faith, and without any intent to defraud, etc.,” such possession by the assignor “ shall be conclusive evidence of fraud.” Sec. 11, Chap. 25, Gen. Statutes. Brunswick v. McClay, ante p. 137. The petition shows the continual possession of the property by the assignor up to the time of the levy of the execution, which, in the absence of a showing of good faith in him who claims under the assignment, is enough to require the courts to hold the deed absolutely void as against the execution creditor. It is contended further for the defendant in error that the assignment is obnoxious also to the seventh section of said chapter, because of the provision for a return to the assignor of the surplus, if any remained, of the property after satisfying Millard’s demand; and several cases were cited which support this view, notably among them being that of Goodrich v. Downs, 6 Hill, 438, and Barney v. Griffin et al., 2 N. Y., 365. But we think that both reason and the better authorities are the other way, and that this section of the statute has no application to an assignment not primarily for the use of the as [434] signor, and when the reservation, is partial and merely incidental. Curtis et al. v. Leavitt, 15 N. Y., 9. Huber v. Waterman et al., 33 Penn. St., 414. Richards et al. v. Levin, 16 Mo., 596. Johnson v. McAllister’s Assignee, 30 Id., 327. That it should ever have been considered that a clause, merely in terms stipulating for that which, if it had been omitted, the law would have implied and required to be done, was an insuperable badge of fraud, seems quite unaccountable, and the cases which so hold are not satisfactory. And finally, it is claimed that the assignment should be held void, also under the facts alleged in the petition as being in violation of section seventeen of the aforesaid chapter of the statutes, which among other things •declares that every assignment of goods, etc., “made with the intent to hinder, delay, or defraud creditors or persons of their lawful rights, damages,” etc., “as against the persons so hindered, delayed, or defrauded, shall be void.” But> this claim is not tenable for want of the very material averment in stating a cause of action under this section, that the assignment was made “ with the intent ” either to hinder, delay, or to defraud the defendant in error. To an assignment made without such intent this section has no application whatever. On the sole ground, therefore, of the conclusive, because unanswered, statutory presumption of fraud arising from the continued possession of the goods by the assignor, the judgment of the court below must be affirmed. JlID&HENT AEEIRMED.