Muchmore v. Budd

The opinion of the court was delivered by Reed, J. It appears from the facts found by the trial court, and already stated in full, that the contest was between,, as defendant-, a purchaser from one Somerville, and, as plaintiff, a purchaser at a sheriff’s sale of the same property under a levy made upon an execution against one Cunningham. Somerville had taken a bill of sale from Cunningham previous to the levy under which the sale was made to the plaintiff. If that transfer was good in law, then the title — 382 — which Somerville transferred to the defendant was superior to the title of the plaintiff. The counsel for the plaintiff have therefore attacked the legality of the transfer of the property from Cunningham to Somerville. They insist that, as against creditors of Cunningham not parties to that transfer, it was a nullity. There are three lines of attack. First It is insisted that'the transfer made by Cunningham to Somerville is void, because it is in contravention of the act .concerning assignments for the benefit of creditors. Second. That it is void by force of the statute of frauds. Third. That it is invalid for want of a legal consideration. Under the first mentioned head, it is insisted that the transfer of the property from Cunningham to Somerville was an assignment of Cunningham’s estate, in trust to an assignee for the creditors of said Cunningham, within the meaning of >the first section of the Assignment act. It is thereupon •argued that, inasmuch as the assignment is for the benefit of ■some, to the exclusion of other creditors, a preference arises Avhich avoids the entire transaction. At the outset, I wish to guard against any apparent admission, that if it should be conceded that the transfer attacked is an assignment, t.he result claimed would follow. It has never been adjudged by this court that a preference contained in an assignment operates to avoid the transfer in toto. The case of Garretson v. Brown, 2 Dutcher 425, affirmed in this court (4 Dutcher 644), called for no opinion upon this point. The query propounded by the facts in that case was, whether a deed and a transfer of notes, made by a debtor previous to an assignment, affected the lawfulness of the assignment itself. It was held that the assignment was valid. Regarding the question as an open one, it seems to me extremely difficult to accord a significance to all parts of the first section of the Assignment act, by the adoption of the construction now claimed for it. The last clause of that section, in express terms, makes void the preferences. The first — 383 — part of tlie section .contains no words of like import respecting an assignment containing preferences. If such an assignment is void, then the preferences fall with the assignment itself by force of the first clause. The second clause is utterly meaningless. But a construction of the act which results in sweeping away the preferences, but compels the assignee to execute his trust for the proportional benefit of all the creditors, conforms to the fundamental rule of statutory construction, that every part of a statute shall have its due effect. This construction would leave the power of sale conferred upon the assignee unimpaired, and his vendee would acquire a complete title. This question, however, is not, in my judgment, involved in this case. For I am unable to regard the transfer, now attacked as an assignment, within either the letter or spirit of the Assignment act. Let us recall the facts. Cunningham was indebted to certain persons, among whom was a corporation existing under the name of Wilkinson, Gaddis & Co. Somerville was the ■secretary of this corporation. On February 27th, officers were in possession of Cunningham’s property, under an execution issued on a judgment entered in an action brought by another creditor. Somerville sought to secure the debt due to the corporation, of which he was an officer. Cunningham agreed to give him a bill of sale. Before the bill of sale was delivered, the company paid off the judgment already mentioned. It promised to pay, through Somerville, and afterward did pay, for a bill of goods that day delivered to Cunningham by Muchmore & Son. The bill of sale was then delivered, for which, in advances and in the debt due, there existed a consideration of over $700. So far, the complexion of the facts do not furnish a hint ■of an assignment. But there was a verbal agreement which accompanied the bill of sale. Cunningham imposed upon Somerville the condition, which Somerville accepted, that Somerville should sell — 384 — the goods, and, after reimbursing his company for their advances, should apply the proceeds to the payment, not only of the debt of the company, but also of the debts of three other creditors. If there was not enough to pay all in full he was to pay them pro rata. If there was more than sufficient to pay them he was to return the balance to Cunningham. Cunningham retained the right to redeem the property, at any time before their sale by Somerville, by the payment of these-advances and debts in full. From this statement of the character of the transaction, it is transparent that the parties to it had not the faintest suspicion that Cunningham was making a statutory assignment. There were no words employed in the negotiation which were-appropriate to or suggestive of an assignment. There was no-list of creditors nor inventory of property, nor was there any talk of these accompaniments of a statutory assignment. No-, bond of Somerville as assignee; no record of any paper; no proceeding in the Orphans’ Court; no notices; no distribution of dividends under judicial supervision; no filing of claims; no discharge from any claim on account of dividend received; none of these statutory features of an assignment appears, at any moment, to have been contemplated. Further-, words, to show that the transaction was not intended as an.. assignment under the terms of the statute, w'ould be wasted. But it is insisted that the first section of the act includes-every conveyance of property to a trustee for the benefit of a creditor or of creditors. It is admitted that a debtor may sell, pledge or mortgage his projierty directly to one or more creditors, but it is insisted that the moment he does this not directly, but to another person for the use of such creditors, the statute seizes upon the transaction. The test thus applied is, does a trust arise? If so, it is an assignment. I am unable to yield my assent to this view. It is, as a matter of course, true, that an assignment, from its essential character, implies a trust. But the opposite is385 not true, that whenever a trust is created an assignment springs into being. Property may be sold, pledged or mortgaged in trust. The trustee in each one of these classes of transfers holds a different interest from that of a trustee in another class, and a trustee under the Assignment act an interest differing from all the rest. Now, I am of the opinion— First. That the transaction now in question was a mortgage. Second. That a mortgage is distinguishable from an assign-. ment; and, Third. That a mortgage to a trustee remains a mortgage and does not become an assignment by reason of the trust. That the transfer was a mortgage seems obvious. As already remarked, the instrument of transmission was an ordinary bill of sale. The parol agreement reserved the right to redeem. A new debt was practically created at the time by the assumption by the corporation to pay the price of the goods delivered by Muchmore. If the company had attempted to hold the goods as absolute owners by virtue of the bill of sale, a court of equity would have transformed it into a security. Had the amount of the advances and debts been tendered to Somerville before he sold, no one would doubt for a moment that he would have been compelled to return the property. Unless it was intended as security, there existed no right to redeem, and, therefore, the reservation of that right manifests the intention of the parties to so regard it. If it was for security, then it was a chattel mortgage. Secondly, the statute concerning assignments does not include chattel mortgages within its terms, but deals with a different kind of transfers. The Assignment act was not designed for the purpose of creating and regulating a new specie of instruments for the transmission of property. Its purpose was to regulate a class — 386 — of transfers already well known. They were called voluntary assignments. They were employed by persons insolvent, or who thought themselves insolvent, to distribute their property to their creditors through a trustee styled an assignee. The transfer became effective without the assent of the creditors; it conveyed to the trustee an irrevocable power to sell the property and distribute the proceeds, and it stripped the debtor of all interest whatsoever in the property. It was an instrument sui generis and - the act was passed to compel equality in distribution among creditors whenever the debtor chooses to adopt this particular scheme for the payment of his debts. Until he does so adopt it, he retains the power to sell, pledge or mortgage the last remnant of his property to favored creditors. Garretson v. Brown, 2 Dutcher 425. In the language of Justice Potts, employed in Garretson v. Brown: “ Until the debtor divests himself of the title 4o his property by assignment, his dominion over it is perfect, and he may use it for any lawful and honest purpose. The ■object to be gained by an assignment under the act is to get ■.the benefit of the release which it provides.” Preferences by means of mortgages are recognized in the Assignment act itself. The distinction between a mortgage and an assignment exists principally in the interest which the mortgagor retains in the property, namely, his equity of redemption. This can be levied upon under a common law execution, and a judgment creditor or a purchaser can protect his rights by redemption or any other act of which the mortgagor was capable. An assignment is intended as a payment and a mortgage as security. Incidentally there is a power of sale under the latter, and there may be said to be security in the former, but the primary objects are as stated. The equity of redemption in the one and the want of it in the other is their distinguishing feature of difference. Burrill Ass., §§ 6, 7. — 387 — Nor, in the third place, does the trust make the transfer any the less a mortgage. As already remarked, it is not the existence of a trust that distinguished an assignment, but of a peculiar kind of trust created by a voluntary assignment alone. So far as Somerville is related to the principal creditor, a trust can hardly be said to exist at all, except that kind of confidence which always obtains between an agent and his principal. He was acting for the corporation. He urged and consummated the transaction for the benefit of the company of which he was an officer. He stood for the corporation, and the sale was practically made to the company. In relation to the other preferred creditors his position was different. But regarding his connection with them as that of a trustee, he was such as mortgagee and not as assignee. The execution of mortgages, both real and personal, to trustees is the exertion of a legal right. Mr. Powell discusses this class of mortgages in his authoritative work on this subject. Any one recalling the frequent exercise of this power by railroad and other corporations, both solvent and crippled, to secure classes of bondholders and other creditors, would be surprised to learn that all these were voluntary assignments. An example of this kind of trust mortgages is afforded by the leading ease of Curtis v. Leavitt, 15 N.Y. 143. And upon this point the following cases are pertinent: Wilson et al. v. Russell et al., 13 Md. 494; Woodruff v. Robb, 19 Ohio 212; Bagg v. Jerome, 7 Mich. 145. In the case of Chapman v. Hunt, 1 McCart. 149, a chattel mortgage was made by Hunt to secure a debt due to Hunt, and also to secure a debt due to Julia Ann Chapman. Chancellor Green said that it was not void on the ground that it was against the policy of the statute regulating assignments for the benefit of creditors, for, on its face, the instrument purported to be not an assignment of the defendant’s property for the benefit of creditors, but a mortgage for the payment of certain specified debts. — 388 — In Morse v. Powers, 17 N. H. 286, one Morse made a mortgage of personal property to one Powers, conditioned to-, save Powers harmless from sundry liabilities incurred by him on account of Morse, and also to save one Robert Morse-harmless from liability from a note which was the proper debt of the other Morse. Chief Justice Parker said that the-, objection that the mortgage was invalid, because it was partly in trust for the benefit of R. Morse, and was in the nature-of an assignment for the benefit of creditors, could not be-sustained. “ It is not essential,” he goes on to say, “ to the validity of' a mortgage that it was to be wholly for the benefit of the-mortgagee, nor will a trust for the benefit of a third party, of' itself, give it the character of an assignment, within the act requiring assignments to comprehend all the property of the-debtor without preferences.” Indeed, deeds of trusts in the nature of mortgages, while-more similar in form to general assignments, are both in law and equity substantially the same as mortgages, the radical distinction between them and assignments for the benefit of' creditors exists, as in the case of mortgages, in the interest of. which the grantor still retains in the assigned property. Burrill Ass., § 8; Perry Trusts, § 602. It is apparent, then, that the present transfer of property was not in law an assignment, and it is equally patent that, it was not so intended. But can this arrangement, although clearly a chattel mortgage, be impeached as an infringement upon the spirit of the Assignment act ? There are cases in our reports where judges-have indicated that a deed or mortgage, or a number of such instruments, although they bore no likeness to an assignment under the statute, were yet void because they contravened the-policy of the statute. Owen v. Arvis, 2 Dutcher 22; Fairchild v. Hunt, 1 McCart. 367; Livermore v. McNair, 7 Stew. Eq. 478. In each of these cases the affair attacked was held to be-void by force of the provisions of the statute of frauds. I. — 389 — think ifc can be confidently stated that there" exists no decision in this state which supports the doctrine that a sale or mort.gage or pledge of property, which is otherwise valid, is voidable by reason of the existence of the Assignment act. In each of the cases mentioned the transaction would have keen held void, upon the same grounds upon which they were nullified, had no statute relative to assignments existed. And ■unless the present transfer is in contravention of the statute ■of frauds, I am of the opinion that it is entirely legal. The next question is, whether the present transaction is ■void because it contravenes the statute of 13 Elizabeth. In 'treating of this phase of the case, it is essential that the ■condition of the record before us be kept in mind. The cause was tried in the Circuit Court without a jury. Certain facts were found, upon which facts, in connection with the bill of ■sale, the court directed judgment to be entered for the defend.ant. By the finding, the transfer was adjudged to be legal. It must be assumed that any question of fact in the case was resolved in favor of the bona fides of the transfer. This •.finding on writ of error, like the verdict of a jury, is conclusive that there existed no actual fraudulent intent to hinder or delay creditors. The only question is, whether, upon the facts found, the 'transfer was fraudulent per se, so that the justice, upon these .facts being conclusively proved before a jury, would have ■been compelled to direct a verdict in favor of the plaintiff. The first query is respecting the effect of the contemporaneous verbal understanding, taken in connection with the written bill of sale; Hoes the fact that the written bill of sale was accompanied by a verbal understanding that it should operate only as a mortgage for third parties, affect the transfer in respect of creditors, and, if so, to what degree? It is, I think, undeniable, that the whole transaction might 'have been the subject of verbal arrangement. ' Nothing in •the statute of frauds required it to be proved by writing. And as possession of the property immediately passed, the ■sale, considered as a chattel mortgage, was valid without — 390 — recording, not only between the parties, but also as to third, persons. The invalidity of the transfer is alleged to arise from the circumstance, that although an absolute bill of sale was made to Somerville, yet, by a verbal agreement, Cunningham reserved an equity of redemption in the goods sold; while the bill of sale purported to transfer all Cunningham’s interest in the goods, yet, by another agreement, not a part of the writing, or in writing at all, he retained an interest. The effect of such an agreement upon the attempt to transmit an interest in property has been the subject matter of considerable contrariety of opinion. It is generally regarded as a badge of fraud. But upon the point whether it carries with its presence an unexplainable inference of fraud, the courts have divided. My conclusion is, that each case must stand upon its own footing, and that no doctrine of fraud per se applicable to all cases alike ought to be laid down. The rule which permits each case to be dealt with according to its individual character leaves to the court the privilege-of discriminating between different kinds of reservations. The courts are always inclined to do this to meet the equity of each cause. This is apparent in comparing two cases in the federal courts, namely, Lukins v. Aird, 6 Wall. 78, and Gaffney’s Assignee v. Signaigo, 1 Dill. 158. In the first case, Aird, being indebted and insolvent, made a conveyance of certain lots to Spring, a creditor, who agreed that Aird should have-the use of the lots for one year’s rent free, with- a privilege, so long as Spring did not desire to make any use of them, himself or to sell them, of renting them at $100 a year. The consideration for the deed was less on account of this-agreement. Justice Davis, in the Supreme Court, held that the conveyance was void, and that the fraud was an inference of law. In the latter case Gaffney made an absolute deed of conveyance, but on a bill filed to set it aside for fraud, the facts were-proved to be that it was made to secure certaiu moneys-advanced to Gaffney by the grantee. Judge Dillon, in the391 Circuit Court, on appeal from a District Court, held the conveyance to be valid as a security. He says that the case is unlike Lukins v. Aird, supra, where a valuable right—rthat of possession—was secretly reserved to the failing debtor contrary to the terms of the deed. Here, he goes on to say, there was no absolute sale in fact, and no attempt to reserve a right at the expense of his creditors. Thus, it is perceived, that when each case is left to be determined by its own circumstances, the facts presented in one may show such incontrovertible evidence of a fraudulent effect upon the creditors, that no other inference but that of fraud could be drawn, while the facts in another case, while showing a technical reservation dehors the writing, is still entirely free from any possibility of harm to creditors, or of any intention to harm them. A conspicuous example of such a difference is presented when considering, on the one hand, a deed designed for record, accompanied by a secret trust of great value to the debtor, as in Lukins v. Aird, and, on the-other hand, a bill of sale of personalty not designed for record, accompanied by a parol reservation of a worthless equity of redemption. I think the weight of authority is accordant with this view. A secret trust inconsistent with the terms of the sale of property is evidence, of fraud, but it is not conclusive evidence of fraud. This is the rule laid down in Massachusetts, in respect of conveyance of both real and personal property, in the case of The Oriental Bank v. Hoskins, 3 Metc. 332. It is the rule adopted in Maine, in the case of Emmons v. Bradley, 56 Me. 333, and in Vermont, in the case of Smith v. Onion, 19 Vt. 427. Other cases for and against this view are cited by Mr. Wait in his work on Fraudulent Conveyances, § 238, who gives the view now expressed his approval as-being in accord with the weight of authority and with reason. This view also appears to be in line with what, I think, has-been the general understanding of the courts of this state, in respect of the effect of the retention of possession by a vendor. — 392 — This, like a secret trust, was considered one of the badges of fraud, in Twynne’s Case. But not only is the rule very generally settled elsewhere that it is explainable (see Oriental Bank v. Hoskins, supra, and cases cited), but such had been the views expressed in the Supreme Court and Court of Chancery in this state. Hall v. Snowhill, 2 Green 8; Miller ads. Pancoast, 5 Dutcher 250; Runyon v. Groshon, 1 Beas. 86. Indeed, it is impossible for me to conceive how the point now under discussion can be regarded as an open question in this court, since the decision of the case of Terhune v. Demarest, 3 C. E. Gr. 532. The facts in that case were, that one Gr.' Terhune and his wife made an absolute conveyance of land to one A. Gr. Terhune, and the consideration named in the deed was "$3,000. A creditor of Gr. Terhune filed a bill to set aside this deed as voluntary and made to hinder and ■defraud creditors. This court held that it was, in a degree, voluntary, and, as against creditors, could not be sustained as a deed. But there was parol testimony introduced to show the character of the consideration and the circumstances which surrounded the execution o.f the deed. In summing up the result of this parol testimony, the learned Chief Justice remarked: “ From this series of facts, it seems to me to be plainly consistent with sound reason and good sense to infer that the debtor executed the conveyance in question to his principal creditor with an understanding, if not clearly expressed, at least tacit, that the latter should sell the property and thus indemnify himself for the moneys due him.” The decree was, that the amount which was actually due from the grantor to the grantee be declared a lien upon the property; that the property should be sold, and after the pay- ' ment of this amount, with interest and the costs of the suit, the surplus should be paid upon the judgment of the attacking creditor. So, here was a writing purporting to be an absolute deed, but accompanied by a verbal understanding which changed its entire character, but which deed, in the absence of a fraudulent intent, was held valid as a mortgage against creditors. — 393 — I conclude that the bill of sale now under consideration was not, upon the ground now laid, void per se. There is a second ground upon which, under the statute 13 Elizabeth, the invalidity of this transfer is asserted. This •ground is not that of a secret trust existing, but it is, that any reservation of an interest, openly or secretly, by an insolvent debtor, who assigns property to a trustee for the payment of selected creditors, is void. This insistance is rested upon the ¡authority of a line of cases nearly all confined to the courts ■of the State of New York. Goodrich v. Downs, 6 Hill 438; Strong v. Skinner, 4 Barb. 546; Lansing v. Woodsworth, 1 Sandf. Ch. 43; Barney v. Griffin, 2 N. Y. 365; Collomb v. Caldwell, 16 Id. 484. The rule which is supposed to control this case had its first •expression in Goodrich v. Downs, supra, decided by the New York Supreme Court. The contest in that case was between ■one, who, at a sale, made on an execution against Goodrich, .had bought some wood, and a person to whom Goodrich had, before the levy of the execution, made an assignment of the wood. , ■ The facts were, that Goodrich, being insolvent, had assigned ■the wood, together with nearly all his other property, to his •son, in trust, to sell and convert the same into money and apply the proceeds to the payment of four of his creditors. The assignment provided that if any surplus remained after •paying the specified debts it should be paid over to Goodrich, fhe assignor. The trial judge held that the assignment was •void and non-suited the plaintiff, who was the assignee. Judge Bronson, in the Supreme Court, held that the clause ■directing that the surplus, if any, after paying the four creditors, should be returned to the assignor, was a trust for the ■use of the assignor. The judge also held that the non-suit was right, because there was no question to leave to the jury. But it is important to remark the ground upon which the ■conclusive character of the fraud was placed. The judge admitted that if the question presented had been whether the assignment violated that section of the statute 13 Elizabeth, — 394 — which declares void every conveyance made with intent to-hinder and delay creditors, the case would have been one for. a jury, under the decisions of the New York Court of Errors. But the judge put the conclusiveness of the fraud upon the-words of another section of the statute of frauds. It is that section, re-enacted in the State of New York, and appearing also in our revision as section 11 of our Frauds and Perjury act. It provides that all conveyances of goods, chattels, &c., made in trust for the use of the person making the same, shall be void, &c. The judge held' that under this section actual intent cut no figure, and that the presence of the reservation of a right to receive any surplus was a trust, and ipso factothe deed was void. Five years later the same judge delivered the opinion of the Court of Appeals in the case of Barney v. Griffin, 2 N. Y. 365. The facts were, that a conveyance of real estate to three persons was made upon trusts to pay certain creditors-in different ways, and, finally, to convey so. much of the real estate as should be left. Upon the authority of the preceding case, it was held a void transaction, regardless of the fact that there might be no surplus to return. The ground upon which these cases were decided' was overruled in the case of Curtis v. Leavitt, 15 N. Y. 9, 124. In that case a corporation had made a deed of trust conveying certain bonds and mortgages to trustees to secure certain debts of the company, existing as bonds, which the company had issued. In the deed there was expressed a trust. The trustees were to repay such surplus money and restore such securities as might remain after the final payment of the bonds. This deed was held to be a legal instrument. The court repudiated the doctrine laid down in Goodrich v. Down, that every reservation of a surplus was a trust for the use of the assignor. Opinion of Comstock, J., 114 et seq. It is true that the same court, in the subsequent case of Collomb v. Caldwell, 16 N. Y. 485, followed Barney v. Griffin in a case involving exactly identical facts. The court — 395 — could not have done otherwise without overruling a ease in the same court. But the court was driven to new ground for a rule of decision. They held that the reservation of a surplus was com elusive proof of actual fraud. Now, whether such a reservation, when there is a surplus,, is fraudulent, is not now the question. It is not fraudulent if the subject matter of "the assignment is of equitable cognizance only. For in that case nothing would be put beyond the reach of a common law execution which had before been within its reach. Leitch, v. Hollister, 4 N. Y. 211. This question is not important, for the weakness of the doctrine thus adopted in Collomb v. Caldwell lies in the rule of evidence laid down respecting the effect to be given to the reservation of a surplus. Under this rule it would not matter if it was demonstrated that no surplus could exist, or that the parties had no notion that it would exist., The answer is, you reserved it. In my judgment, the rule is an arbitrary one, for I cannot conceive why the assignment of a person who happens to include in it a customary reservation of a surplus, when in fact the value of the property transferred is less than the amount of debts, should be held to be constructively fraudulent. Chancellor Walworth announced no such doctrine in Beck v. Burdett, 1 Paige 305. He held, that inasmuch as it was doubtful whether the property assigned was sufficient to pay the debts, a mere hypothetical reservation of .the surplus would not vitiate the assignment. The Supreme Court of Pennsylvania, in Rahn v. McElrath, 6 Watts. 151, took the view of Chancellor Walworth. The court say that the proper limitation upon the right to assign property to preferred creditors is, that the amount assigned bear a reasonable proportion to the debt provided for’, a defect in which would be evidence of fraud in fact, which, however, is not the subject of legal direction. In Dana v. The Bank of the United States, 3 Watts & S. — 396 — 223, 250, where there was an equity of redemption and a reservation of surplus, as in the present case, the deed of ■assignment for preferred creditors was held legal. The same result was reached in the case of Phillips v. Improvement Co., 25 Penna. St. 56, where a surplus was reserved. In the case of Floyd & Co. v. Smith, 9 Ohio St. 546, the ■court referred to, and expressly disapproved of, the rule laid down in Goodrich v. Downs, supra, and Barney v. Griffin, supra, and hold that the reservation of a surplus, after paying certain debts, by a person contemplating insolvency, is not a conclusive badge of fraud. In Ely v. Hair et al., 16 B. Monr. 230, the facts in which case presented the very question decided in the two New York cases, there is a discussion of the rule in them promulgated, and these cases are disapproved. In Richards et al. v. Levin, 16 Mo. 596, the decision is staled to be, that where a debtor in insolvent- circumstances assigns all his property for the benefit of certain preferred creditors, directing the surplus, if any, to be paid to the grantor, this does not make the deed fraudulent, where it is ■admitted that the whole property is insufficient to pay even the preferred debts. In Miller v. Stetson & Co., 32 Ala. 161, the case of Goodrich v. Downs was under discussion and the court refused to recognize it. The court held that the reservation of a surplus in that case was not fraudulent. Involving substantially the same question is the case of Andrews v. Ludlow, 5 Pick. 28, where there was an assignment by an insolvent debtor of property to such of his creditors as should, withi'n a certain time, become parties to the assignment, with a reservation to the assignor of the dividends that would have gone to such creditors as failed to come in. Here, in a different form, was the same trust that was held to be so calculated to baffle creditors, in Goodrich v. Downs, as to be conclusively fraudulent. The court said that the agreement to pay over the surplus could have no effect, because the ■debts greatly exceeded the value of the property. Other — 397 — cases are cited in note 2 to section 207 of Burrill on Assignments (3d ed.) In the present case, the property subject to execution was-less in value than the amount of the debts. There is no-evidence that the accounts had any value. There is no proof, therefore, that any property was put beyond the reach of' creditors fraudulently. But a conclusive answer to this point of attack is, that the-transfer was a mortgage. As soon as that is admitted, then, by reason of the equity of redemption remaining in the-assignor, which is subject to a common law execution, the surplus is put within reach of an execution creditor without resorting to equity. Leitch v. Hollister, 4 N. Y. 211. In regard to the objection raised that there was no consideration for the assignment, little need be said. The point could only have substance when the transfer was regarded as-an absolute bill of sale. Viewing it either as a mortgage or a trust, all question in respect to the consideration disappears,, as the debts intended to be secured were admittedly existing. I think the judgment ordered by the Circuit Court should: be affirmed.