Case ID: daly-ny_12/html/0525-01.html
Source: Caselaw Access Project
Author: {"author": "Beach, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

M. L. Reichenbach et al., Plaintiffs, against Frederick Winkhaus et al., Defendants.
    [Special Term.]
    (Decided June, 1884.)
    Where a general assignment for benefit of creditors, although completely-executed and acknowledged, is not delivered and is not intended by the parties to take effect at the time, but is retained by the assignor and by him delivered to his attorney with instructions to keep it until further orders from the assignor or until the attorney shall think necessary to file it for the best interest of all the creditors, there is a reservation of power to revoke which renders the assignment void. ■
    Trial of an action by the court without a jury.
    
      • The action was brought bjr judgment creditors to set aside a general assignment by the judgment debtor for the benefit of his creditors.
    It appeared from the evidence that the defendant Spethmann, the assignor, being insolvent and intending to go to Europe to see his creditors, executed an assignment for the benefit of his creditors, without preferences, to the defendant Winkhaus, which was dated and acknowledged by both the assignor and assignee on March 19th, 1883. The instrument contained the usual acceptance of the trust by the assignee. The assignment was not delivered at the time, and was not intended by the parties to take effect as an assignment on the date thereof, but was retained by the assignor and by him handed to his attorney, with the express direction to keep it until further orders from him, or until said attorney thought necessary to file it for the best interest of all the creditors. The assignor sailed for Europe on March 21st, 1883, and immediately thereafter, the plaintiffs began an action and obtained an attachment therein against the property of the debtor Spethmann on the ground of his non-residence. After the levy of the attachment the assignment was first delivered by the assignor’s attorney to the assignee, and was thereupon filed. The attachment was subsequently vacated on technical grounds. It appeared also that the whole stock in trade of the assignor had, prior to the assignment, been consigned to the firm of which the assignee was a member, and was held by them for sale on commission and as security for advances made thereon.
    
      Franhheimer Rosenblatt, for plaintiffs.
    Chamberlain, Carter Hornblower, for defendant Winkhaus.
    
      Henry Gfrasse, for defendant Spethmann.
   Beach, J.

[After stating the facts as above.] — A prompt decision of this case seems desirable, because, if postponed, long delay will unavoidably result. For that reason, my conclusion is briefly stated, without argument. An insolvent assignment reserving to the assignor power of revocation is void in judgment of law (Riggs v. Murray, 2 Johns. Ch. 565; s. c., 15 Johns. 571).' Any purpose of the assignor which would render the assignment legally fraudulent if contained in the deed, is equally effective if shown by other proof (Gasherie v. Apple, 14 Abb. Pr. 64). The deposit of the assignment with a stranger after complete execution to hold until receipt of further orders from the assignor, or to file when, in the judgment of the depositary, it should be for the best interest of all creditors, * is a clear reservation of the power to revoke, rendering it void. There may be another reason, in that no immediate delivery, followed by an actual and continued change of possession of the assigned estate, did or under the circumstances could take place. The title to the property passed upon execution by the assignor and acceptance by the assignee (Cruat v. Sedgwick, 1 Barb. 210; Butler v. Stoddard, 7 Paige 163; s. c., 20 Barb. 505).

Judgment for plaintiffs, with costs.