Case ID: neb_1/html/0417-01.html
Source: Caselaw Access Project
Author: {"author": "by Hall, Ch. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Rogers v. Jones.
    1. Prato as to creditors. If an insolvent convert his property into notes, payable to a third party as his assignee, and the transaction is concealed from his creditors, a creditor’s bill will lie to reach the fund, and the plaintiff therein will be entitled to it.
    This was a creditor’s bill filed in the District Court for Douglas county, on the seventh of August, 1858. At the March term, 1858, of said court, Rogers recovered a judgment against Jones and Wood for $1,181.79, on which execution was issued and returned unsatisfied. At the time of the recovery of the judgment the defendants were druggists in Omaha, and shortly thereafter dissolved the partnership, Jones continuing the business and Wood leaving the Territory. Soon after this, Jones being insolvent, sold the stock to Ford at the agreed price of $4,100, taking his notes therefor, payable in six, twelve, eighteen and twenty-four months. These notes ran to the order of “Samuel Pease, assignee of James A. Jones,” and were delivered to him. This fact was not communicated to any of the creditors, and did not become known until disclosed by the answer filed in the cause. The question was whether a trust was created here which would defeat the bill. A decree was rendered for the plaintiff, and defendant appealed.
    
      JR. A. Howard, for appellant.
    
      J. M. WoolwortJi, contra.
   The court,

by Hall, Ch. J.,

held that the transaction was fraudulent as to creditors. It was unnecessary to decide, as contended for by the appellant, whether a trust in personalty could be created by parol under our statutes. The case must be determined on its own facts. It would open a wide door to fraud to suffer an insolvent to convert his property into notes payable to a friend, and for the parties to, conceal the transaction from all interested. It would give them the best opportunity to apply the money collected on the notes to the benefit of the assignor, without the possibility of the creditors being able to follow the fund.

Decree affirmed.