Chandler v. Caldwell

Perkins, J. On August 25,1857, James Caldwell made an affidavit before the clerk of the Shelby Common Pleas,-that an execution had issued upon the judgment in a certain cause, (describing it,) against the goods, &c., of Samuel S. Chandler, and that “ Augustos C. Handy and Alexander M. Hargrave have in their hands personal goods, moneys, rights and effects of the said Chandler,” with which the - judgment might be paid, and over and above three hundred dollars’ worth, &c. The three parties named, were summoned before the Court. Hie defendants answered: 1. Denying that any execution had issued on the judgment. 2. Denying, generally, the truth of each and every allegation in the affidavit. 3. Specially admitting the judgment mentioned in. the affidavit, but not the execution, and averring that Handy and Hargrave had no property of the execution defendant in them hands; but that the property which they held,-which had once belonged to him, was vested in them, in trust, under and by -virtue of the following written instrument, executed in good faith, viz., “The undersigned, creditors of Samuel S. Chandler, each [258] for himself, agrees to and with said Chandler, that he, said Chandler, shall make an assignment of all Ms property, real and personal, except three hundred dollars’ worth, to A. C. Handy and A. If. Hargrave, as trustees for our benefit, agreeing upon a pro rata division of it by said trustees, among us, to release said Chandler from any further liability to us on our claims against him; and should said property be more than sufficient, when faithfully and judiciously converted by said trustees into cash, to pay our claims in full, the overplus shall be returned to said Chandler.” Signed by said Chandler, the trustees, and thirty persons, being, as is supposed, creditors. Demurrer to the third paragraph of the answer sustained. Final judgment for the plaintiff, as follows, viz., “ that there were choses in action belonging to Chandler in the hands of Handy and Hargrave, sufficient to pay the plaintiffs’ judgment; and that they pay over, and deliver to the sheriff, &c., notes or accounts sufficient to pay, &c., and that they be restrained,” &c. The bill of éxceptions states that this judgment was rendered upon the pleadings, without any evidence, either written or parol, except the pleadings and accompanying exhibits; and that “ this was all the evidence given in the cause.” Out statute providing for proceedings supplementary to execution, is an article of the code, 2 R. 8.,- p. 152, composed of eight sections; the first four of which give proceedings against the judgment debtor alone, for the discovery of his property wMch may be concealed in his own or some other person’s possession; and which, if discovered, might be levied on by virtue of an execution in the officer’s hands. The fifth section of the article, being § 522 of the code, gives a proceeding against other persons than the execution defendant, who may be charged with having property of the debtor in their hands, or who may be indebted to him. This section contemplates that the execution defendant is to be made a party with such other persons. Wall v. Whisler, 14 Ind. 228. The remaining sections relate to matters common to the [259] proceedings against the execution defendant alone, and against other persons. The proceeding in the case at bar, was commenced under § 522, against other persons than the execution defendant, though, .as we have seen, he was also made a party. As this proceeding could not be instituted till after the issuing of execution, and such issue was denied, it was necessary, on the trial, to prove the issue of execution as alleged. There does not appear to have been such proof. Again, if the assignment set up in the third paragraph of the answer, which was removed from the record by the ruling-on the demurrer, was valid, then Handy and Hargrave had no property belonging to the execution defendant in their hands, nor did they at the lime owe him any thing-; and, on this hypothesis, the judgment was wrong. The assignment was not void on its face, as it was made before our present statute relative to assignments. It was not void on its face at common law. See Burrill on Assignments, chapters 13 and 11. It purports to assign all the debtor’s property, does not show that there are any other than the creditors provided for, and contains no compulsory clause for release. An assignment for the benefit of creditors, even preferred creditors, is not void for the reason that it hinders and delays creditors, and actually prevents some, intentionally, from obtaining payment at all out of the property assigned. An assignment, or a conveyance to an individual in trust, for the benefit of the assignor, and to prevent any and all creditors from reacliing the property, when necessary for the payment of then- claims, would be. See Burrill, supra, chap. 11. Again, the judgment was wrong in directing, even if the assignment was void, the delivering over to the sheriff of accounts to be applied on the execution. They were not subject to sale on execution without the consent of the debtor. 2 R. S., § 138, p. 136. Such sale, indiscriminately, of all choses in action, where buyers could have no knorvledge of their validity, or of set-offs that might exist, would lead to a ruinous sacrifice of property. The Court should have permitted them to be collected by the assignees, or have appointed a receiver to collect them, if it held the assignment [260] void. 2 R. S., p. 73; How. (N. Y.) Code, 483. Brisco v. Askey, 12 Ind. 666, indicates a judgment that might be rendered in such case. R. A. Riley and R. L. Walpole, for the appellants. M. M. Ray, for the appellee. Per Ouriam. — The judgment below is reversed, with costs. Cause remanded for further proceedings.