Richards v. Levin

Gamble, Judge, delivered the opinion of the court. 1. In this case it is admitted that the assignment made by Levin, when in failing circumstances, was intended to secure bona fide creditors named in the assignment; and that the property conveyed by the assignment, although all the prop - erty he possessed, was insufficient to satisfy the debts mentioned in the deed as the debts of the preferred creditors. It is admitted that he was, at the time of making the deed, indebted to other persons besides the creditors he preferred; and that the assignment contained a clause, under which, any sur [599] plus, after paying the preferred debts, was to be paid to him. That a debtor in failing circumstances may lawfully prefer one or more of his creditors, and pay the debts due to them in full, while other creditors are left unpaid, does not now require the citation of authorities to establish. That the clause in an assignment directing the surplus, after paying the enumerated debts, to be paid to the grantor, is nothing more than a declaration of the effect which the law would give to the conveyance, is a perfectly plain truth; and in this case, where the parties have agreed that the whole amount assigned is insufficient to pay the preferred debts, the idea that the reservation of a surplus to the grantor will render the deed fraudulent, is a mere mistake. The court below treated the case rightly, in the instructions given, and the judgment is affirmed.